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With great power comes great scalabilitySTATPRO GROUP PLCANNUAL REPORT AND ACCOUNTS 2015

1

2015 HIGHLIGHTS

REVENUEANNUALISED RECURRING REVENUE1

PROFIT BEFORE TAX

ADJUSTED EBITDA2

£30.19m2014 £32.02mChange (6%)Constant currency (1%)

£28.70m2014 £29.39mChange (2%)Constant currency 1%

£2.41m2014 £2.37mChange 2%Constant currency 14%

£4.04m2014 £4.36mChange (7%)Constant currency 1%

EARNINGS PER SHARE – BASIC

EARNINGS PER SHARE – ADJUSTED2

DIVIDEND PER SHARE – TOTAL FOR YEAR

2.4p2014 2.4pChange –

2.6p2014 2.7pChange (4%)

2.9p2014 2.9pChange –

FINANCIAL HIGHLIGHTS

• Group Annualised Recurring Revenue (‘ARR’)1 increased to £28.70 million (2014 at constant currency: £28.33 million) • StatPro Revolution ARR1 up 46%4 to £7.80 million (2014 at constant currency: £5.35 million) • Forward order book of contracted revenue3 for StatPro Revolution increased by 57% to £14.66 million (2014 at constant

currency: £9.31 million)• Recurring revenue from StatPro’s cloud services accounts for 27% of Group ARR (2014: 18%) and 34% on pro forma basis

following Q1 2016 acquisitions• Adjusted EBITDA2 up to £4.04 million4 (2014 at constant currency: £4.02 million) • Full year dividend maintained at 2.9 pence per share

OPERATING HIGHLIGHTS

• Advanced risk analysis features released in 2015 allowing StatPro Seven Risk clients to begin migrating to StatPro Revolution• Average annualised revenue from StatPro Revolution clients increased 67% to £28,300 (2014: £17,0004)• StatPro Revolution Performance module is on track for release in summer 2016• Signed new five year banking facility with Wells Fargo, increased in January 2016 to approximately £24.5 million

ACQUISITIONS IN Q1 2016

• US based, Investor Analytics, leading cloud-based complementary risk solution business• 51% shareholding in South African InfoVest Consulting, software business specialising in data warehouse, ETL (Extract,

Transform and Load) and reporting solutions

1 Annualised Recurring Revenue is the annual value of revenue contractually committed at year end. 2 Adjusted EBITDA and adjusted earnings per share are EBITDA and earnings per share after adjustment for amortisation of acquired intangible assets, and share-based

payments (notes 3 and 10).3 Forward order book of StatPro Revolution contracted revenue is the total amount of software and professional services revenue that is contractually committed at year

end including conversions from StatPro Seven. 4 At constant currency.

STATPRO REVOLUTION ANNUALISED RECURRING REVENUE UP 46%

StatPro provides cloud-basedportfolio analysis solutions to the global investment management industryREAD MORE ABOUT OUR STRATEGY AND BUSINESS MODEL ON PAGES 8 TO 11

To access this report online visit www.statpro.com/investors

IN 2015, WE COMPLETED THE RISK FUNCTIONALITY OF REVOLUTION, EMPOWERING US TO MIGRATE STATPRO SEVEN RISK CLIENTS ONTO STATPRO REVOLUTION

READ MORE ON PAGE 18

STATPRO REVOLUTION ARR HAS GROWN AT A HIGHER RATE THAN OTHER REVENUES AS THE SERVICE IS DEVELOPED ON A HIGHLY SCALABLE PLATFORM

READ MORE ON PAGE 22

ANTICIPATING THE MARKET DYNAMICS AND POSITIONING OUR PRODUCTS TO OFFER THE MOST PRODUCTIVE AND EFFICIENT SERVICES HAS ALWAYS BEEN OUR FOCUS

READ MORE ON PAGE 6

STRATEGIC REPORT1 2015 Highlights2 At a Glance4 Chairman’s Statement6 Market Overview8 Strategic Framework10 Business Model12 Chief Executive’s Review16 Operational Review24 Financial Review28 Principal Risks and Uncertainties

GOVERNANCE32 Board of Directors34 Group Executive Board36 Introduction to Corporate Governance37 Corporate Governance40 Directors’ Report43 Remuneration Report

FINANCIAL STATEMENTS47 Independent Auditor’s Report49 Group Income Statement49 Group Statement of

Comprehensive Income50 Balance Sheets51 Statement of Cash Flows52 Group Statement of Changes

in Shareholders’ Equity53 Company Statement of Changes in

Shareholders’ Equity54 Notes to the Financial Statements90 Five Year Record91 Financial Calendar92 Directors and AdvisersIBC StatPro Office Locations

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DECJUNDECJUN*DECJUNDECJUNDECJUNDEC2010 2011 2012 2013 2014 2015

£m

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Strategic Report | Governance | Financial Statements

32

500 CLIENTS*

12 OFFICES

38 COUNTRIES

8 DATA CENTRES

20 SALES PEOPLE

* Approximate number including Investor Analytics.

KEY DATA

NORTH AMERICA EMEAA

STATPROREVOLUTIONARR GROWTH

46%2014: 68%

LTV/CAC

16.12014: 11.3

LTV: Lifetime ValueCAC: Cost of Acquiring Customer

GROWTH IN AVERAGEREVENUE PER STATPRO REVOLUTION CLIENT

67%2014: 37%

STATPRO REVOLUTION ARR

OFFICE LOCATIONS

2015 GROUPREVENUE

£30.19m

£10.39m £19.80m

StatPro Revolution ARR £'000s

Number of clients < £12k

Number of clients > £12k

ARR BY CLIENT TYPE

OUR EXPERTISE

ASSET MANAGERS

58%THIRD PARTY ADMINISTRATORS

24%PRIVATE WEALTH

8%PENSION FUNDS

6%OTHER

4%

OUR STAFF RETENTIONRATES ARE RELATIVELY HIGH

ACADEMIC AWARDS HELD AT STATPRO INCLUDE: • ACMT QUALIFIED (ASSOCIATION OF CORPORATE TREASURERS)

• SEARCHSECURITY.CO.UK AWARD

• MAXIMUM SCORE (110/110) AT BOCCONI UNIVERSITY (MILAN, ITALY)

• DEAN'S LIST FOR OVERALL ACADEMIC ACHIEVEMENT

• HONOURS IN FINANCIAL ANALYSIS AND PORTFOLIO MANAGEMENT

• BEST PAPER AWARD AT INTERNATIONAL CONFERENCE IN DATA MINING

• CUM LAUDE GRADUATES

• ‘2015 OUTSTANDING ALUMNUS’ AWARD

< 1 Year

WE HAVE EXPERTS WITH QUALIFICATIONS IN CIPM, IIMR, FINANCIAL RISK MANAGEMENT, PRINCE2, CEFA, CFA, CISA AND ACA.

57%HOLD ABACHELOR’SDEGREE

29%HOLD A MASTER'SDEGREE

4%ARE CHARTERED FINANCIAL ANALYSTS

12%PROFESSIONALLYPUBLISHED THEIROWN WORK

1-2 Years

20% 13% 26% 22% 19%2-5 Years 5-10 Years 10+ Years >

AT A GLANCE

LuxembourgCape Town South Africa

Boston & New York USAMontréal & Toronto Canada

London United KingdomParis France

Milan ItalyFrankfurt Germany

Hong Kong ChinaSydney Australia

* Jun 2014 – change in Minimum Subscription Policy.


54

CHAIRMAN’S STATEMENT

ProgressI am pleased to report that your Company increased total Annualised Recurring Revenue by 1% to £28.7 million at constant currency (2014: £28.3 million) including a 46% increased contribution from StatPro Revolution of £7.8 million (2014: £5.4 million). Owing to reduced professional services income and currency effects, total revenue decreased 6% to £30.2 million (2014: £32.0 million). Adjusted EBITDA increased by 1% at constant currency to £4.0 million (2014: £4.0 million). StatPro Revolution related recurring revenue now amounts to £14.1 million (2014: £11.7 million), representing 56% of total software recurring revenue (2014: 46%).

AcquisitionsOn 21 January 2016, StatPro Inc. (a wholly owned subsidiary of the Company) acquired the entire share capital of Investor Analytics LLC, the US-headquartered, cloud-based risk analytics company to hedge funds and asset managers. This acquisition brings a complementary cloud-based risk service, a highly professional team, new clients and greater market penetration into the important US and hedge fund market.

With effect from 1 March 2016, StatPro South Africa (Pty) Ltd. (a wholly owned subsidiary of the Company) acquired a 51% shareholding in InfoVest Consulting (Pty) Ltd, a South African headquartered software provider, specialising in data warehouse, ETL and reporting software for the asset management industry.

By taking a majority stake in InfoVest, your Company will participate in the benefits of the expanding compliance management market as well as improving the product and services we offer to clients. In addition, InfoVest’s data warehouse software is a cost-effective solution for asset managers and service providers to manage their internal data effectively in order to provide input data to StatPro Revolution and other systems.

FinancingThe Group signed a new financing facility with Wells Fargo in July 2015 available for acquisitions, share buy-backs and general corporate purposes. As part of the acquisition of Investor Analytics in January 2016, the financing facilities were increased and the key features of the facilities now are:

Carl BaconChairman

• Five year commitment period to July 2020• £10 million committed revolving credit facility• US$7 million committed term loan• US$3 million committed deferred drawdown loan• £7.5 million uncommitted additional facility

DividendYour Board is proposing a final dividend of 2.05p per share for 2016 payable on 25 May 2016 to all shareholders on the register at the close of business on 29 April 2016 taking the total dividend to 2.9p per share (2014: 2.9p per share).

ProductsIn 2015, total research and development expenditure was maintained at the high level of £4.9 million (2014: £5.0 million) representing 16% of Group revenue. The total cash expenditure in 2015 on StatPro Revolution, including marketing and other costs, amounted to £5.4 million (2014: £5.5 million).

It has been a long journey but at last your Company is positioned in 2016 to deliver the first cloud-based, integrated platform for performance, risk and compliance analytics in the asset management industry.

PeopleI would like to take this opportunity once again to congratulate our employees for the achievement of delivering such a fantastic suite of products and I look forward to their continued success selling and implementing these products throughout 2016.

ProspectsAsset managers still continue to grapple with increased regulation, more complex investment strategies, cost reduction and demands for better communication. Front office and middle office technology will continue to converge. The asset management industry is one year closer to your Company’s vision of integrated performance, risk and compliance delivered in the cloud.

Carl BaconChairman11 March 2016

The asset management industry is one year closer to your Company’s vision ofintegrated performance, risk and compliance delivered in the cloud.

The acquisition of Investor Analytics brings a complementary cloud-based risk service, a highly professional team, new clients and

greater market penetration into the important US and hedge fund market.

StatPro Revolution related recurring revenue now amounts to £14.1 million, representing 56% of total

software recurring revenue.

The Company is positioned in 2016 to deliver the first cloud-based integrated platform for performance, risk and compliance analytics in

the asset management industry.


76

31%

0%

28% 26% 25% 24%

Portfolio Modelling and Risk Analytics

Trading Technology

and Infrastructure

ComplianceTechnology

TradingPlatforms

DerivativesSystems

32%TECHNOLOGY

AVERAGE = 21%

TRANSFORMING OPERATIONAL PROCESSES WITHIN ASSET MANAGERSINCREASED INDUSTRY REGULATION

Regulatory focus on the asset management industry will continue to place demands on operational processes and technology.

A recent study1 found that much of the impact is being felt in compliance, IT and operational functions.

Spending on regulation and compliance continues to rise.

of respondents in a 2015 survey1 of the UK’s top 10 asset managers said they expected to spend more on regulatory concern.

Regulation remains one of the top challengesfor the entire industry.

of asset managers surveyed2 said that compliance with regulatory requirements was their number one challenge.

StatPro Revolution provides advanced risk management and risk monitoring features designed to meet tough regulations. Our cloud-based platform allows asset managers to quickly implement regulatory monitoring and reporting solutions to anyone without the need for expensive in-house IT infrastructure, software or support.

As the asset management industry continues to grow, it faces a number of challenges and opportunities. As a technology provider to the industry, StatPro is well placed to help clients meet these challenges and to make the most of opportunities.

78%

82%

MARKET OVERVIEW

Three key areas of our market where StatPro can provide innovative and cost effective solutions:

“THE INDUSTRY’S ASSETS UNDER MANAGEMENT HAVE ALREADY DOUBLED OVER THE PAST DECADE IN DOLLAR TERMS, AND COULD SWELL TO US$400 TRILLION BY 2050.”ANDREW HALDANE, CHIEF ECONOMIST,BANK OF ENGLAND

“ASSET MANAGEMENTHAS MOVED CENTRESTAGE FOR BANKS”RORY CALLAGY, VICE-PRESIDENT OFINVESTOR SERVICES, MOODY’S

1 Source: Regulation fatigue: tackling the burden of regulatory compliance for asset management. Alpha FMC, July 2015.2 Source: EY Global survey on asset management investment operations 2014.

Risk analysis systems installed prior to the financial crisis.

of Portfolio Modelling and Risk Analytics systems were installed prior to 2008 and are at risk of becoming obsolete.(37% 2009-12, 18% 2013-14)

2016 is a funding peak of a replacement cycle foradvanced analytics and risk systems.

INCREASING ASSET MANAGEMENT SPENDON ADVANCED ANALYTICS TECHNOLOGY3

Spend on advanced portfolio analytics, compliance and risk systems is expected to increase by at least 2%.

45%

3 Source: CEB 2015 FSI Survey.

ReplacementDate

Percentageof Firms

13%30%30%13%

2014201520162017

Within asset managers, the middle office serves as a go-between for front office trading and back office administration. Firms are now focusing on transforming the middle office to become a bottom line contributor and a strategic business partner.

PwC comments4 “Right-sourcing the middle-office functions can help asset managers achieve several benefits, including maintaining or gaining competitive advantage, and enabling them to leverage scarce resources to focus on strategic decision support and address complex compliance issues.”

The middle office represents an area of focus to drive efficiency and growth. The nature of the middle office is changing as more demand is placed on it to service more internal clients as well as external regulatory demands for complex and granular data. If this entire function is not efficient, then it has an impact on the entire organisation.

“Under-investment in middle-office functions has resulted in an infrastructure that is inflexible and unscalable for product, customer, regulatory growth and increasing product complexity.”4

4 Source: Making the middle office top of mind: Transforming the asset management middle office to a bottom-line contributor. PwC.

“GLOBAL INVESTABLE ASSETS FOR THE ASSET MANAGEMENTINDUSTRY WILL INCREASE TO MORE THAN US$100 TRILLION BY 2020,WITH A COMPOUND ANNUAL GROWTH RATE OF NEARLY 6%.”PWC ASSET MANAGEMENT 2020 – A BRAVE NEW WORLD

“AS BANKS SCALE DOWN OTHER OPERATIONS, THE LIMELIGHT IS FALLING ON ASSET MANAGEMENT.”ALEX BIRKIN, HEAD OF WEALTH AND ASSETMANAGEMENT ADVISORY, EY

In StatPro’s view, the industry is only part way through this transformation of middle office operations with many still struggling with outdated processes and limited technology.

The majority of asset managers are still between the‘As-is’ and ‘Mid-way’ phase with very few alreadyat the ‘To-be’ stage 3.

‘As-is’ • Middle office services exist in silos• Transactional processing requires

excessive manual effort and attention

‘Mid-way’ • Middle office collaborates with front office• Contains some capacity for analysis• Has higher degree of automation

and better control

‘To-be’ • Middle office viewed as a strategic partner• Relies less on static data, more on

accessibility of actionable information• System integration capacity increases• Middle office operations are low

cost and highly automated

StatPro’s mix of game changing technology and industry expertise helps our clients move their middle office operations from the ‘As-is’ state to the ‘To-be’ state as outlined above. The StatPro Revolution platform is designed to make the process of daily performance measurement and complex portfolio analytics more efficient, more automated and an enabler of strategic value.


98

STRATEGIC FRAMEWORK

Our strategy is focused on three areas to drive business growth:Summary of our strategic initiatives, our achievements during 2015, how we measure our progress and what risks could disrupt us from delivering on our strategic initiatives.

STRATEGIC INITIATIVE BUSINESS MODEL PROGRESS DURING 2015 PRINCIPAL RISKS AND UNCERTAINTIES KEY PERFORMANCE INDICATORS

BROADENING THE FUNCTIONAL AND TECHNICAL CAPABILITIES OF THE STATPRO REVOLUTION PLATFORM

• Technology• Scalability• Expertise

Advanced Risk Management We made risk management a key focus of new functionality in 2015. We added over 140 new risk measures, introduced new relative and risk attribution analysis, and released a new risk simulation framework and on-demand stress testing. We also added support for the new Australian APRA standard risk measure, being the first vendor to offer a turn-key solution for this new regulation.

• Cyber security threats• Technology dependency• Availability of industry and

technical expertise

ADVANCED RISKMANAGEMENTROADMAP DELIVEREDIN 2015

SEE PAGE 14

MIGRATING STATPRO SEVEN CLIENTS TO STATPRO REVOLUTION

• Expertise• Technology• Partners

Accelerating progressIn 2015 we began the migration of some large key StatPro Seven clients over to the StatPro Revolution platform. This process involves data migration tasks and ETL (extract, transform and load) work that can then be repeated for multiple clients going forward. The new advanced risk management features have also allowed us to begin work with four key risk clients on their cloud migration.

• Cyber security threats• Competition• Availability of industry expertise• StatPro Revolution functional capability

57STATPRO SEVEN CLIENTS ALREADY USING STATPRO REVOLUTION

18MIGRATIONSINITIATED IN 2015

SEE PAGE 18

GROWING REVENUE FROM EXISTING STATPRO REVOLUTION CLIENTS AND PARTNERS

• Expertise• Technology• Partners

Growing relationships The beauty of a cloud-based platform is the ability to quickly bring new portfolios into the system. The tiered business model also encourages clients to upgrade portfolios to gain access to more advanced analytics. This is especially important when it comes to compliance features for regulated portfolios.

• Cyber security threats• Technology dependency• StatPro Revolution functional capability• Competition

44%OF 2015 STATPRO REVOLUTION NEW SALES FROM EXISTING CLIENTS

UPLIFT SALESMADE TO OVER

24% OF CURRENT CLIENT BASE

SEE PAGE 22

FULL PRINCIPAL RISKS AND UNCERTAINTIES SECTION

ON PAGES 28 TO 31


1110

REVENUE JOURNEY

BUSINESS MODEL

The recurring ‘rental’ model has many benefits over traditional software licenses and maintenance and provides transparency and stability for the business. Our client contracts are at least one year in length and are typically three years or more. In 2015, over 80% of our clients were on multi-year contracts.

Per portfolio and not per userThe StatPro Revolution pricing model is based on the number of portfolios the client wishes to analyse within the platform. It is also based on the complexity of the analysis and what the client requires from each portfolio. There are four portfolio types within StatPro Revolution each offering increasing levels of analytical capability.

BRONZE Designed for total level analysis, statistics and unlimited reporting.

SILVER In addition to Bronze, provides security level analysis with attribution, contribution, allocation and risk.

GOLD In addition to Silver, supports complex assets, fixed income contribution analysis, advanced attribution models and detailed/custom benchmarks.

PLATINUM In addition to Gold, provides advanced risk management, risk compliance monitoring and fixed income attribution analysis.

There is a minimum annual fee of $18,000 ($36,000 if complex asset coverage is required) even if the client only loads a single portfolio.

A key element in this model is the ability for clients to create as many users as they wish to access the platform and perform analysis and reporting. This differentiates StatPro Revolution from many other analytics systems. By allowing unlimited users (with a fair usage policy) we encourage our clients to share access to multiple people both inside and outside their organisation. Advanced user management controls allow for secure profiles to be created so clients can manage users, content and access. The client is in full control of the data and analysis that users can see.

This innovative approach allows for more people within the asset manager to benefit from the analysis being created and helps teams create a ‘self-service’ strategy for their analysis distribution. It also encourages clients to add more portfolios to the system so they can benefit from company wide access without being penalised for adding additional users.

Another important source of revenue is through our fund administrator network. Fund administrators and other service providers use StatPro Revolution to provide investment analytics to their asset manager clients. Fund Administrators can be very large organisations who hold accounting data on millions of portfolios that can be then analysed in StatPro Revolution. Asset servicing is a very competitive marketplace and having the ability to provide the right portfolio analytics in a fast, flexible and secure way helps providers win new business and maintain existing clients. StatPro works with over 34 asset service providers in this way.

StatPro has always operated a recurring revenue business model for all our software.

This was a pioneering approach before the days of Software as a Service and the cloud, but it has allowed us to transition the business from on-premise software to cloud-based solutions without adversely impacting revenue streams or the revenue profile of clients.

IMPLEMENTATIONCONSULTING

Client signs up for StatPro Revolution and accepts additional implementation consulting services. The level of consulting depends on the number of portfolios and complexity of the securities. This can range from a few days to hundreds of consulting days for a global project.

ADDITIONALREVENUE

As the client can provide access to as many users as they wish, more people can benefit from the analysis, which encourages the business to request more of the portfolio estate to be loaded into StatPro Revolution.

RECURRINGSUBSCRIPTION

The client typically signs a standard three year term. Revenue is recognised over the length of the contract, resulting in the deferral of some revenue.

ANALYSIS LEVELUPGRADES

Clients can quickly and easily upgrade portfolios to gain access to more advanced levels of analysis. One example of this is upgrading from Gold to Platinum level to provide advanced risk management analysis on a portfolio.

HOW WE GENERATE VALUE

The diagram below shows the key drivers behind StatPro’s growth and value. It is based on four interlinking value drivers.

Our pioneering technology is making advanced portfolio analysis easier and more cost effective for investment managers of any size. The StatPro Revolution platform enables our clients to calculate an array of multi-asset class performance, risk and compliance analytics for any portfolio.

Our people are at the heart of everything we do at StatPro. Our industry experience and expertise combined with our technology is what makes our products and services so valuable to clients. Every person in each department across 12 global offices is working towards the same goal – to make the most complete, scalable, secure, and intuitive portfolio analytics platform in the market.

When creating our technology we recognise the importance of scalability. Our clients are seeing enormous pressures placed on their aging infrastructure and applications, so we invest heavily to ensure our cloud-based solutions are scalable, robust, secure and future proof to allow them to meet any demand.

By working with partners such as asset service providers, industry consultants, data management specialists and third party developers we can enrich the StatPro Revolution platform making it more valuable to a wider audience within our clients. A strong partnership base also allows StatPro to focus on our core strengths of portfolio analytics.

HOW WE GENERATE VALUE

The key drivers behind StatPro’s growth and valueare based on four interlinking value drivers.


1312

The unique capabilities of StatPro Revolution Performance are its unprecedented scalability and speed as well as

the rich data management facilities.

www.statpro.com

CHIEF EXECUTIVE’S REVIEW

OverviewIn 2015, the Group built upon the inflexion point reached in 2014, with (‘ARR’) for StatPro Revolution reaching £7.8 million, up from £5.4 million (in constant currency) and was 27% of total Group ARR (2014: 18%).

With the addition of Investor Analytics (‘IA’) in January 2016, StatPro’s cloud services amount to £11.1 million and represent 34% of ARR on a pro forma basis.

Importantly, key measures of StatPro Revolutionperformance were very strong in 2015. ARR increased by 46% (2014: 68%), the order book grew by 57% (2014: 70%) and the average revenue per client grew 67% (2014: 37%).

One of the key metrics used by SaaS businesses is to estimate the costs of acquiring each customer (Cost of Acquiring Customers or ‘CAC’) and compare that with the Lifetime Value of the customer contracts (Lifetime Value or ‘LTV’). StatPro’s LTV/CAC ratio rose to 16.1 (2014: 11.3).

StatPro revenues were £30.19 million in 2015 (2014: £32.02 million). As expected, professional services revenue was lower in 2015 at £1.64 million (2014: £2.76 million) reflecting the lower cost of implementing StatPro Revolution for its clients. Whilst revenue from services was lower, the Group generated more sales of recurring revenue.

During 2015, sterling’s strength reduced Group revenues by about 5% versus 2014, which impacted the Group’s profit. Following the acquisition of IA, about 18% of the Group’s ARR is sterling-based and about 36% is US dollar-based, on a pro forma basis.

The Board is recommending that the full year dividend is maintained at 2.9p per share (2014: 2.9p).

Justin WheatleyGroup Chief Executive

Strategy Having positioned StatPro early as a true cloud-based service, the Group has developed a significant commercial advantage in its market. It is not possible to repurpose traditional software as a multi-tenant software service nor is it easy to build the vast range of functionality from scratch to meet the needs of the increasingly demanding asset management industry.

The Group’s collective knowledge across many markets in multiple analytics disciplines has helped build a very broad range of highly sophisticated analytics, designed to suit the needs of all types of asset managers across all the major markets.

Over the last 20 years, the requirements of the asset management industry have expanded hugely, significantly increasing the cost of doing business whilst at the same time increased competition has applied pressure on fee income.

This combination of anticipating the market dynamics and positioning the Group’s products to offer the most productive and efficient services to its clients has always been the focus. In common with many rapidly maturing markets, the cost of entering the performance and risk analytics market is growing. StatPro believes that it has a sustainable technology lead in its market and is benefiting from its early investment, which has helped provide enhanced functionality for its clients.

As part of the Group’s strategy, StatPro also anticipates that it will make further acquisitions. Having created StatPro Revolution as the upgrade for StatPro Seven, StatPro Revolution could also be the upgrade for a number of other products in the market. The investment cost of moving to the next generation of technology is now so high that it makes more sense for some companies to sell their valuable client base rather than take the development and investment risk.

The Group has developed a significant commercial advantage in its market.

Current trading and outlookThe Group’s forward order book is now £36.6 million, of which £14.7 million is from StatPro Revolution. Trading in 2016 has started well and the Group expects another year of good growth in sales of StatPro Revolution.

With the forthcoming release of StatPro Revolution Performance, StatPro will continue the process of moving its many clients of StatPro Seven onto StatPro Revolution.

As the Group moves closer towards becoming a business with the majority of its revenues derived from the cloud, StatPro anticipates that its operating margins and cash generation will improve.

Operational reviewStatPro Revolution is sold on a per portfolio basis with four service levels (Platinum, Gold, Silver and Bronze). Upsells of additional portfolios or higher service levels require little or no implementation, demonstrate that the client is happy with the service and improve the marginal profitability of each client. Upsells to existing StatPro Revolution clients represented 44% of new StatPro Revolution sales.

In 2015, the Group migrated all the functionality of the StatPro Seven Risk Management Module (‘SRM’) to StatPro Revolution to create the Advanced Risk Management module (‘ARM’) and added some significant new functionality not available in SRM. As a result, the Group anticipates moving most of its SRM clients to StatPro Revolution during the course of 2016.

The acquisition of IA will enhance this move as the Group expects that many of its existing clients will see the combination of IA and ARM as one of the most complete risk services available in the market.

During 2016, StatPro will release StatPro Revolution Performance. This is the core module that manages transaction-based performance and enables the complete conversion of all its StatPro Seven clients to StatPro Revolution. The unique capabilities of StatPro Revolution Performance are its unprecedented scalability and speed as well as the rich data management facilities.

The release of StatPro Revolution Performance will mark the end of an eight-year investment process to redevelop all the Group’s performance and risk capabilities in the new technology of the cloud. As a result, whilst there will always be a need to innovate, StatPro anticipates that its development costs as a percentage of revenues will begin to reduce over time.

Development in 2015 was focused on delivering the Advanced Risk Management module to enable the conversion of its SRM clients to StatPro Revolution. The Group also added significant functionality to its Compliance module for AIFMD and UCITS IV. StatPro will add IA to this risk platform during 2016 and in the process create one of the most complete and cost effective risk solutions available today in the market. This will make risk one of StatPro’s key sales themes for 2016.

In addition, StatPro has also been working on the high performance Hadoop® platform for StatPro Revolution. This new platform will enable the Group to calculate performance and risk for the largest of portfolios in much the same time as StatPro does for smaller portfolios thanks to parallel processing using the ‘map-reduce’ process. This new calculation platform will be the basis of the benchmark management and fixed income attribution modules. StatPro expects to see significant improvement in calculation times as a result.

StatPro Revolution Performance remains on track to be released to clients in the second half of the year. The Group has a number of clients that are working with it integrating their data to test the system. These tests are going well and the Group expects to be engaged in a number of projects to implement StatPro Revolution Performance as soon as it is released.

Justin WheatleyGroup Chief Executive11 March 2016


1514

STRATEGY IN ACTION

Broadening the functional and technical capabilities of the StatPro Revolution platform

ADVANCED RISK MANAGEMENTWe made risk management a key focus of new functionality in 2015. We added over 140 new risk measures, introduced new relative and risk attribution analysis, and released a new risk simulation framework and on-demand stress testing. We also added support for the new Australian APRA standard risk measure, being the first vendor to offer a turn-key solution for this new regulation.

2015 MILESTONE

• We delivered the advanced risk management roadmap to all clients


1716

SALESTHEMES

NEEDS

IMPLEMENTATION

SALESPROCESS

EXPERTISEPRODUCT

FEEDBACK

In 2016, we will release the transactional performance module StatPro Revolution Performance and this will allow us to

target larger clients and to expand this sales theme.

www.statpro.com

OPERATIONAL REVIEW

SalesStatPro Revolution sales in 2015 have been driven mostly by three ‘Sales Themes’: Compliance, Equity Attribution and Conversions.

Total Group revenue was down 1% at constant currency. EMEAA revenues were up 1%* and North American revenues were down 5%*.

2015 KEY SALES THEMES:

Risk compliance

Equity attribution

StatPro Seven conversions

Compliance sales (driven by regulation) remain solid in Europe, where we still see a fragmented market and many manual and inefficient processes. While UCITS and AIFMD regulations are now consolidated, there is still plenty of scope to improve automation and efficiency in the processes of asset managers.

Compliance is also playing a role in South-East Asia and also, in particular, in Australia: during the course of 2015 we released a solution targeted to that market, followed by sales and a general positive response. Also, the regulators in South Africa, a market where we have a strong presence, released in 2015 a Hedge Fund regulation, which has many traits in common with the EU AIFMD regulation. We have already signed up the first client for this functionality and the sales pipeline looks promising. We are also following with interest the developments in the USA, where the SEC has distributed a consultation paper with the objective of strengthening risk management procedures for mutual funds investing in derivatives. StatPro is confident we can develop in a short time a solution that tailors our existing offering to the new American rules.

* At constant currency.

Dario CintioliManaging Director

We are now a specialist in risk compliance, knowledge is widespread across the Group and we know how to adapt our solutions quickly to the specific requirements for each local regulation. In 2016, we expect Compliance to remain a leitmotif of our sales.

New equity attribution sales continue to be focused on small to medium money managers. In 2016, we will release the transactional performance module, StatPro Revolution Performance and this will allow us to target larger clients and to expand this sales theme. It is worth mentioning that, especially in America, the prospects in this area often require to associate an equity factor risk solution to performance attribution. The acquisition of Investor Analytics delivers this component and we expect a mutual benefit in sales to equity managers for both equity performance and factor risk analyses.

We are now a specialist in risk compliance and we know how to adapt our solutions quickly to the specific requirements for each local regulation.

Client conversions continued to be an important component of our sales, securing our StatPro Seven clients and paving their way to the StatPro Revolution platform. In 2015, we completed the risk functionality of Revolution, empowering us to migrate StatPro Seven Risk clients into Revolution. We are busy migrating the first few clients and we expect to accelerate the process in the coming months.

In 2016, we expect the same sales themes to dominate our sales strategy, with an increased emphasis on new clients and new sales, supported by the constant growth of the product and an increasing functional maturity. We believe the release of Revolution Performance to be pivotal for increasing the average deal size across the Equity Attribution sales theme.

Client ServicesThe most important achievement of 2015 is the definition of a standardised approach to implementations for buy-hold performance and risk clients. Learning the lessons of recent years, Client Services has worked with Development to produce a standard format of inputs (internally called the Market Value Data Model) that can yield successful implementations independently from the complexity of our clients’ positions. This is the result of in-depth work that started in the product years ago, abstracting the complexity of financial products (especially derivatives) in a generalised framework. This new approach simplifies implementations and reduces client support calls, yielding increased productivity for our Client Services department.

During the year, we have continued increasing the profile of our consultants and continued re-enforcing the Pre-Sales function, researching more cooperation and combined sales efforts between subject matter experts and business development.

We still see margins for improving productivity and we believe that the accelerating maturity of the product will increasingly allow us to transform unbillable support time into billable consultancy.


1918

TODAY

STATPRO SEVEN CLIENTS

Q3 2016OPTION 1

Start using StatPro Revolution now

OPTION 2Wait for certain features

to be integratedOPTION 3

Move over when all features fullyintegrated into StatPro Revolution Platform

STATPRO REVOLUTION PERFORMANCE

LAUNCH

STATPRO INVESTORANALYTICS

INTEGRATION1

2 3

STRATEGY IN ACTION

Migrating StatPro Seven clients to StatPro Revolution

ACCELERATING PROGRESSIn 2015 we began the migration of some large key StatPro Seven clients over to the StatPro Revolution platform. This process involves data migration tasks and ETL (extract, transform and load) work that can then be repeated for multiple clients going forward. The new advanced risk management features have also allowed us to begin work with four key risk clients on their cloud migration.

2015 MILESTONE

• 57 StatPro Seven clients already using StatPro Revolution – 18 migrations initiated in 2015

MIGRATION OPTIONS


2120

ProductIf 2015 was the year of Risk Management, 2016 will be the year of Performance Measurement, when we will release the important transactional performance module, StatPro Revolution Performance. This module brings to the performance industry a new capacity of scaling thanks to the elasticity of the cloud and to modern development technology. Some large clients and fund administrators suffer from a lack of scalability and we are convinced that, with StatPro Revolution Performance, the platform solves middle office issues that have been hampering scale and productivity for larger institutions.

The other innovative aspect of StatPro Revolution Performance is the introduction of a superb workflow framework, which is designed to facilitate and automate the data validation process, and is at the heart of transactional performance measurement. We believe that the workflow we have designed can significantly reduce the time needed to perform data controls and clean transactional data to reconcile official fund performance with security-level measurement. We will also release a highly scalable Benchmark Manager, built on modern database technology, for managing an infinite number of client benchmarks in a single application.

The acquisition of Investor Analytics (‘IA’) is a gem that we have started to integrate. The first objective is to integrate data flows from and to the IA module. During the course of the year we will introduce single sign-on for user management and integrate the product inside the StatPro Revolution menu, leading to a single-system experience even with separate products, a technology that we have also successfully implemented for StatPro Revolution Performance.

IA brings factor analysis to StatPro, a front office oriented interface, stronger presence in North America and another great group of people, highly compatible with StatPro’s culture. StatPro gives IA strength in asset class coverage, performance analytics and synergies in risk functionality. Together, the two systems deliver a complete multi-model risk solution, covering all asset classes with industry leading functionality. This is an exciting achievement for StatPro.

TechnologyStatPro continues to work with the latest technology. We believe that combining the best technology with our in-depth industry knowledge is what makes us special. It is part of the ‘secret sauce’ that sets us apart from the competition. During 2015, we upgraded many components of our private cloud platform including the core network, which is at the heart of any system. In 2016, we are replacing the server hardware in our datacentres with more compact, more cost efficient hardware that will run the analytics engines, databases and web servers for StatPro Revolution Analytics.

During 2015, we continued our development in the cloud which resulted in some key advancements. This included auto-scaling, which allows the StatPro Revolution Performance system to automatically scale up to compute huge amounts of transactional performance data, producing security level weights and returns, the raw ingredient for any asset manager to perform portfolio analytics. This technological advancement will result in a game-changing performance measurement product for the industry in 2016.

OPERATIONAL REVIEW(CONTINUED...)

We remain a leader in our field as we bring a new generation of portfolio analytics systems to the global asset management industry.

In 2016, we will be working even more closely with our cloud partners (Microsoft and Amazon) to counter the threat of cyber-attacks. We are already working on innovative new ways to encrypt client data within the cloud while maintaining encryption key management within our private data centres. This allows us to work closely with clients and their information security teams to ensure we meet all their security requirements, including the very stringent requirements from global tier 1 asset managers and banks. Our technology capability means we remain a leader in our field as we bring a new generation for portfolio analytics systems to the global asset management industry.

2016


2322

Growing revenue from existing StatPro Revolution clients and partners

GROWING RELATIONSHIPS

The beauty of a cloud-based platform is the ability to quickly bring new portfolios into the system. The tiered business model also encourages clients to upgrade portfolios to gain access to more advanced analytics. This is especially important when it comes to compliance features for regulated portfolios.

2015 MILESTONE

• 44% of 2015 StatPro Revolution new sales from existing clients

• Uplift sales made to over 24% of current client base

STATPRO REVOLUTION ARR

STRATEGY IN ACTION

0

1

2

3

4

5

6

7

8

9

DECJUNDECJUN*DECJUNDECJUNDECJUNDEC2010 2011 2012 2013 2014 2015

£m

129

146

275

StatPro Revolution ARR £'000s

Number of clients < £12k

Number of clients > £12k

* Jun 2014 – change in Minimum Subscription Policy.


2524

FINANCIAL REVIEW

RevenueGroup revenue decreased by 6% at actual rates to £30.19 million (2014: £32.02 million), although at constant currency the reduction was 1%. Growth of 64% in revenue from StatPro Revolution (at constant currency) was offset by reductions in revenue from StatPro Seven, data, and professional services.

Contracted revenueThe forward order book of contracted revenue for StatPro Revolution increased by 57% to £14.66 million (2014 at constant currency: £9.31 million). The total forward order book of contracted revenue was £36.57 million at 31 December 2015 (2014 at constant currency: £36.91 million). The proportion by value of recurring software licences and data clients at the end of 2015 secured to the end of 2016 or beyond amounted to 71% (2014: 77%); the weighted average length of contracts committed remained unchanged at 16 months.

New contracted revenueNew sales of recurring contracts were up 7% to £4.13 million (2014: £3.87 million). Professional services revenue was lower than prior year at £1.64 million (2014: £2.60 million at constant currency) reflecting the lower cost of implementing StatPro Revolution for its clients. Approximately 85% of new recurring contracted revenue came from existing clients (2014: 78%).

Recurring revenue The Group’s business model of Software as a Service (‘SaaS’) recurring revenue contracts continues to provide excellent visibility of revenue. The ARR from software licences and data fees at the end of December 2015 increased by 1% to £28.70 million (2014: £28.33 million at constant currency). The net growth rate for StatPro Revolution ARR was 46% (2014: 68%).

StatPro Seven annualised recurring revenue was resilient with a net cancellation rate (at constant currency and excluding the impact of conversions to StatPro Revolution of £1.56 million) of 3% (2014: nil). With the impact of conversions to StatPro Revolution, the ARR for StatPro Seven reduced to £17.41 million (2014: £19.52 million).

The ARR for Data (including overage) increased by 1% at constant currency to £3.49 million (2014: £3.46 million).

Revenue by regionRevenue increased in the EMEAA region by 1% to £19.80 million (2014 at constant currency: £19.59 million). In the North American region, revenue decreased by 5% to £10.39 million (2014 at constant currency: £10.93 million), as shown in table 1 below.

Revenue by serviceCloud revenues (incorporating StatPro Revolution, Risk and Data) grew by 9% as shown in table 2 opposite:

TABLE 1

Revenue by region2015

£ million2014*

£ millionChange

%

EMEAA 19.80 19.59 1%

North America 10.39 10.93 (5%)

30.19 30.52 (1%)

FX – 1.50

Group revenue 30.19 32.02 (6%)


The Group’s business model of Software as a Service (‘SaaS’) recurring revenue contracts continues to provide excellent visibility of revenue.

Andrew FabianGroup Finance Director

StatPro Revolution revenueStatPro Revolution recurring revenue made up 27% of the Group total (2014: 18%) and has grown at a higher rate than other revenues as the service is developed on a highly scalable technology platform. On a pro forma basis, the Group’s cloud revenues are now 34% of total Group revenues, taking into account the two acquisitions in early 2016.

The total recurring revenue from clients whose subscription includes StatPro Revolution was £14.11 million (2014: £11.65 million) representing 56% (2014: 46%) of total software recurring revenue.

StatPro continues to focus on increasing the average revenue per client. This resulted in losing some lower value contracts whilst overall the average revenue per StatPro Revolution client in 2015 increased by 67% (2014: 37%).

Operating expenses Operating expenses (before amortisation of intangible assets and exceptional items) reduced by 7% (3% at constant currency) to £23.72 million (2014: £25.53 million). Whilst the business continues to invest, the Group benefited from cost efficiencies and internal streamlining of processes the Group had implemented in 2014. The average number of employees reduced to 242 (2014: 251).

TABLE 2

Revenue by service2015

£ million2014*

£ millionChange

%

StatPro Revolution and cloud-related 11.43 10.52 9%

StatPro Seven and non-cloud-related 18.76 20.00 (6%)

30.19 30.52 (1%)

FX – 1.50

Group revenue 30.19 32.02 (6%)


ProfitabilityThe adjusted EBITDA was down 7% at actual rates but up 1% at constant currency to £4.04 million (2014: £4.02 million at constant currency) as shown in table 3 below.

Gross profit margin (see note 3) for the period was 61% (2014: 62%).

SaaS-based KPIsOne of the key metrics used by SaaS businesses is to estimate the costs of acquiring each customer (Cost of Acquiring Customers or ‘CAC’) and compare that with the Lifetime Value of the customer contracts (Lifetime Value or ‘LTV’), and the results for StatPro are presented in table 4 overleaf.

Generally a value of three or higher for the ratio of LTV:CAC is considered acceptable for a successful SaaS business and for StatPro it is currently around 16. The Cost of Acquiring Customers has increased as the Group is focusing on larger contract values, Implied Customer Lifetime has increased due to lower cancellation rates and therefore the Customer Lifetime Value has also increased significantly in the last two years by over 300%.

Finance income and expense Net finance expense was £0.29 million (2014: £0.29 million), and is mainly due to the finance costs of the Group’s credit facility.

TABLE 3

Adjusted EBITDA 2015

£ million 2014*

£ millionChange

%

StatPro Revolution and cloud-related (5.87) (6.07) 3%

StatPro Seven and non-cloud-related 9.91 10.09 (2%)

4.04 4.02 1%

FX – 0.34

Adjusted EBITDA 4.04 4.36 (7%)

Adjusted EBITDA margin

StatPro Revolution and cloud-related (51.3%) (57.7%)

StatPro Seven and non-cloud-related 52.8% 50.5%

Adjusted EBITDA margin – total 13.4% 13.2%



2726

TABLE 4

StatPro Revolution contracts only 2015 2014 2013

Average Cost of Acquiring Customer (‘CAC’) (£’000s) 26.0 17.3 9.7Implied Customer Lifetime (years) 14.8 11.5 8.1

Average ARR per customer (£’000s) 28.3 17.0 12.5

Implied Customer Lifetime Value (‘LTV’) (£’000s) 418 196 101

LTV: CAC 16.1 11.3 10.4


Profit before tax The impact of currency movements resulted in a reduced adjusted profit before taxation by £0.17 million. Profit before taxation at constant currency was 14% higher at £2.41 million (2014: £2.11 million at constant currency) and up 2% at actual rates. Adjusting for amortisation of acquired intangible assets and share-based payments, the adjusted profit before taxation was £2.56 million (2014: £2.58 million).

TaxationThe tax charge was £0.79 million (2014: £0.77 million). The overall effective tax rate was 33% (2014: 33%). This is higher than the prevailing UK rate mainly due to the impact of operations in countries with higher tax rates than the UK.

Earnings per shareAdjusted earnings per share was 2.6p (2014: 2.7p). Actual and diluted earnings per share was 2.4p (2014: 2.4p). DividendsThe Directors are recommending maintaining the final dividend of 2.05p per share (2014: 2.05p) making a total dividend for 2015 of 2.9p per share (2014: 2.9p). The final dividend will be paid on 25 May 2016 to all shareholders on the register at the close of business on 29 April 2016. Total dividends paid in 2015 amounted to £1.96 million (2014: £1.89 million). The dividend cover (calculated as adjusted eps: dividends per share) was 0.90 times (2014: 0.93).

Balance sheetThe Group’s net assets at the year end reduced to £41.52 million (2014: £45.69 million), the reduction mainly being due to currency movements on goodwill values.

Cash flow and financingCash inflow from operating activities of £6.55 million (2014: £7.71 million), was lower than the prior year, mainly due to adverse working capital movements. The Group ended the year with net cash of £1.28 million (2014: £2.68 million).

Research and development and capexThe research and development team is now focused solely on the Group’s cloud-based solutions, the StatPro Revolution platform. The level of R&D expenditure was similar to the prior year at £4.93 million (2014: £4.99 million) (an increase of 5% at constant currency), equating to 16% of Group revenue (2014: 16%). The total expenditure on StatPro Revolution including marketing and other costs was £5.39 million (2014: £5.52 million). Development costs of £4.05 million were capitalised in the year (2014: £3.62 million) and amortisation on internal development was £3.54 million (2014: £3.35 million). Expenditure on other intangible assets was £0.08 million (2014: £0.44 million) and total capital expenditure on property, plant and equipment was £0.88 million (2014: £1.86 million).

Post Balance Sheet EventsAcquisition of Investor AnalyticsOn 21 January 2016, StatPro Inc. (a wholly owned subsidiary of the Company) acquired the entire share capital of Investor Analytics LLC, the US-headquartered, cloud-based risk analytics’ company to hedge funds and asset managers.

Acquisition of majority control of InfoVestWith effect from 1 March 2016, StatPro South Africa (Pty) Ltd. (a wholly owned subsidiary of the Company) acquired a 51% shareholding in InfoVest Consulting (Pty) Ltd, a South African headquartered software provider, specialising in data warehouse, ETL and reporting software for the asset management industry.

Further details on these acquisitions are provided in note 28.

Principal financial risks The principal business risks and uncertainties affecting the Group are described on pages 28 to 31. For each category of risk, the directors have identified means by which the risk can be managed or reduced in a cost effective way, whilst accepting that some risks cannot be completely eliminated. Details of key financial risks are considered below.

FINANCIAL REVIEW(CONTINUED...)

Financial risk management The current and projected financial risks of the Group are managed by the Group finance team. The primary risk relates to financing facilities and this is mitigated by ensuring very tight control of cash and detailed forecasting of business cash flows.

Liquidity riskThe Group’s cash position is closely monitored with weekly updates from all overseas operations and daily updates of cash collected from customers. Any aged debtor balance that is overdue is investigated to ascertain the reason and to resolve the situation promptly. Monitoring procedures for short-term cash projections allow the Group finance team to closely monitor the key liquidity and other financial ratios to ensure that there is sufficient liquidity in the business at all times and sufficient headroom in relation to the banking covenants.

New financing facility The Group signed a new financing facility with Wells Fargo in July 2015 for acquisitions, share buy backs and general corporate purposes. The facility is committed to July 2020, subject to compliance with agreed covenants. At 31 December 2015, the Group had both net cash of £1.28 million and committed credit facilities of £10.0 million available. As part of the acquisition of Investor Analytics in January 2016, the financing facilities were increased and the key features of the facilities now are:• Five year commitment period to July 2020• £10 million committed revolving credit facility• US$7 million committed term loan• US$3 million committed deferred drawdown loan• £7.5 million uncommitted additional facility available

The primary financial covenants are linked to recurring revenue and adjusted EBITDA while allowing the Group to invest for growth. The financing costs will be amortised over the five year term. This new facility strengthens the Group’s long-term financial structure and therefore the Board believes that the Group is well positioned to manage the business risks.

Foreign exchange risk managementThe Group is exposed to exchange rate fluctuations given that the majority of its revenue is non-sterling based. The Group also has a significant proportion of its costs in the same currencies as its revenues and therefore there is a reasonable degree of natural reduction in overall currency risk.

All material foreign currency transaction exposures (i.e. sales and purchase contracts denominated in a different currency to the local reporting currency) are hedged through use of foreign exchange contracts as soon as the amount and timing of the exposure is identified with reasonable certainty. The Group’s policy is not to hedge profit and loss translation exposures.

As part of our liability management, we have made use of currency swaps with a total principal value at 31 December 2015 of approximately £4.90 million denominated in USD, CAD, and EUR, to create synthetic currency hedges in order to provide a partial hedge against movements in the fair value of investments in overseas subsidiaries. As the Group continues to grow and generates increased profits overseas in foreign currencies this exchange rate exposure is expected to increase. Following the recent acquisition of Investor Analytics, the Group has an increased revenue and profit exposure to the USD although this is mitigated by an increase in USD-denominated costs and debt.

Interest rate risk managementThe Group is exposed to interest rate risk and an increase in interest rates would increase the interest payable on the Group’s banking facility. Given the continued benign outlook for interest rates, the Board has decided not to undertake any interest rate hedging but will review the position from time to time. The risk to rising interest rates (now that the Group has returned to a net debt position in 2016) would be partly mitigated by an increase in interest income from surplus cash and deposits, where the policy is to seek to maximise interest return without exposure to inappropriate liquidity or counterparty risk.

Andrew FabianGroup Finance Director11 March 2016


2928

OPERATIONS

STRATEGIC

REPORTING

COMPLIANCE

SUBSIDIARY

BUSINESS UNIT

DIVISION

ENTITY-LEVEL

INTERNAL ENVIRONMENT

OBJECTIVE SETTING

EVENT IDENTIFICATION

RISK ASSESSMENT

RISK RESPONSE

CONTROL ACTIVITIES

INFORMATION & COMMUNICATION

MONITORING

PRINCIPAL RISKS AND UNCERTAINTIES

By understanding the impact of unfolding regulatory changes and updating its products

in time, StatPro helps clients meet new regulatory requirements.

The goal is to maximise value for the entire enterprise.

To allay customer concerns regarding their data being in the ‘cloud’, StatPro has invested in both

the ISO 27001 and SSAE16 certifications.

Enterprise Risk Management frameworksAn Enterprise Risk Management (‘ERM’) framework provides a holistic approach that aligns an organisation’s strategic, operational, reporting and compliance objectives across all levels to manage all key business risks and opportunities. The goal is to maximise value for the entire enterprise.

The interaction between business objectives, risk framework components and organisational level is best illustrated by the Committee of Sponsoring Organisations of the Treadway Commission’s (‘COSO’) ERM Cube.

The ISO 31000 ‘Risk Management – Principles and Guidelines’ standard (published 2009) complements COSO’s ERM framework by addressing the management system that supports the design, implementation, maintenance and improvement of ERM processes.

StatPro has outlined its strategy in this Annual Report. Key to the successful outcome is our understanding of StatPro’s market drivers:

TransparencyTo ensure that StatPro adds the most value possible to its clients, it must listen and understand their requirements:• StatPro uses client ‘new feature’ requests and sales team

feedback to prioritise product enhancement.• StatPro also employs suitable financially qualified staff

(e.g. to CFA level, even on the product development team) to ensure that we understand our clients’ needs and their issues.

RegulationBy understanding the impact of unfolding regulatory changes and updating its products in time, StatPro helps clients meet new regulatory requirements.

CompetitionStatPro has significant resources to deliver on what is required, yet is small enough to react to changing market threats or opportunities. Such agility is a key corporate attribute.

CloudTo allay customer concerns regarding their data being in the ‘cloud’, StatPro has invested in both the ISO 27001 and SSAE16 certifications. StatPro has embraced the best cloud product development and management practices for over four years, and has partnered with industry-leading IT services suppliers to ensure the best service availability and security.

OutsourcingStatPro has invested in its own products with best-practice procedures for its own staff to ensure that clients’ requirements are routinely met.

Figure 1 – Coso’s CRM cube

StatPro’s approach to risk


3130

1 Business strategy fails:‘StatPro’s business strategy fails to identify new markets and/or products; and/or fails to improve on its current offerings.’

CONTEXTStatPro continues to make considerable investment in StatPro Revolution, and will continue to migrate its ‘traditional’ asset performance and analytics products to the cloud with the launch of StatPro Revolution Performance in 2016. If market take-up of StatPro Revolution (or StatPro Revolution Performance) does not meet expectations, or current clients fail to sign up for the planned cloud-based products over current hosted or installed products, the cloud investment won’t have been maximised. Indeed, legacy-product clients may leave for competitor offerings that they feel more comfortable with.

Product design, complemented by a sufficient Marketing and Sales effort is key to identifying and winning new clients; at the same time convincing them of the merits of cloud technology (flexible, scalable, lower total cost of ownership, safe and online availability).

MITIGATIONS• Continual investment in Development and Quality

Assurance.• Regular monitoring and reporting of project

development and quality; user-acceptance testing of enhancements.

• StatPro actively promotes itself within the asset management industry through thought leadership, marketing content and regular participation at industry events.

• The Board has regular meetings with all teams to ensure that products and services meet market requirements.

• Continually update market and competitor intelligence.

• Continually monitor user feedback and internal KPIs.

2 Sales target not met: ‘StatPro signing insufficient new contracts.’

CONTEXTIf our externally announced targets are not met by new sales or uplifts of existing contracts it could cause uncertainty in the marketplace and impact our reputation.

Lower revenues could put pressure on our EBITDA levels and cash generation.

MITIGATIONS• Continuous control over the sales process and

close monitoring of the sales pipeline by regional sales directors.

• Targets are set each year and territory performance is monitored against them.

• The sales pipeline is managed in Salesforce and is updated with reasons for lost opportunities e.g. sales performance, functionality, etc.

• Actions are identified in sales strategy meetings to meet objectives and sales targets.

• Monthly updates of sales forecasts are made.• StatPro actively promotes itself within the asset

management industry through thought leadership, marketing content and regular participation at industry events.

PRINCIPAL RISKS AND UNCERTAINTIES(CONTINUED...)

The Group risk assessment has identified the following top 4 risks that StatPro must manage at the corporate level:

3 Clients not satisfied: ‘StatPro’s reputation suffers if clients’ expectations are not met.’

CONTEXTNew client implementations are critical in setting the relationship going forward. StatPro Revolution allows for faster implementations than traditional software but this process still needs to be managed carefully.

The delivery of new functionality and demonstrating its value is an important function of client management. Clients need to see value from the platform and the client service team are responsible for communicating this to clients.

MITIGATIONS• Ensure a good understanding of clients’ needs.• Allocated Account Managers to manage the

client relationship.• Escalation of issues to director level.• Proactive account management.• Multi-year contracts foster client commitment.

4 Cyber-attacks, information security breaches or incidents:‘StatPro’s reputation is damaged as a provider of cloud-based solutions and/or incurs financial penalties if there is a serious data security incident.’

CONTEXTLoss of service availability due to a cyber-attack on the Company’s systems.

Data confidentiality breach in the event of an internal or external ‘hack’ leading to the loss of confidentiality or integrity of sensitive client or company data.

MITIGATIONS• StatPro’s internal development, IT and HR

processes are compliant with the ISO 27001 and SSAE16 information security standards.

• StatPro is expanding its external audit and certification programme to cover all development operations during 2016.

• StatPro uses strong data encryption and best practice encryption key management for securing sensitive data.

• StatPro has dedicated resources responsible for data security compliance and technical data security practices within the business.

• StatPro conducts penetration tests and vulnerability scans on all public facing systems to ensure that the risk from known system vulnerabilities and cyber threats are minimal.

The principal financial risks of the Group are outlined in the Finance Review.

The Strategic Report on pages 1 to 31 is approved by the Board.

By order of the Board

Andrew FabianCompany Secretary11 March 2016

3332


BOARD OF DIRECTORS

1 Member of the Audit Committee.2 Member of the Remuneration Committee.3 Member of the Nominations Committee.

Carl Bacon CIPM (1 2 3)

Non-Executive ChairmanJustin WheatleyGroup Chief Executive

Andrew Fabian FCA FCTGroup Finance Director

Mark Adorian (1 2 3)

Non-Executive Director and Chairman of the Nominations Committee

Stuart Clark (1 2 3)

Senior Independent Director and Chairman of the Remuneration Committee

Jane Tozer MBE OBE (1 2 3)

Non-Executive Director and Chairman of the Audit Committee

EXPERTISE:

Carl’s expertise in risk, performance measurement and GIPS enables him to add value to product development and StatPro’s business strategy. As he continues to publish and teach in these fields, external market knowledge is brought to the StatPro Board.

EXPERTISE:

Justin has done many things, from sales to product development and design, to the acquisition of 12 companies and running a public business that covers over ten offices around the world. Today his focus is implementing the strategy for growing StatPro Revolution into the leading portfolio analysis service.

EXPERTISE:

Andrew has significant experience in the financial services sector and is a chartered accountant and qualified corporate treasurer.

EXPERTISE:

Mark’s career in the asset management industry and experience in business growth adds value to the StatPro Board. His understanding of market data in this industry supports the business and strategy.

EXPERTISE:

Stuart brings experience in managing a global data organisation as well as more than 40 years working in the financial industry. His experience at IDC and at Ipreo, enables Stuart to add growth, acquisition and market intelligence value to StatPro.

EXPERTISE:

Jane brings a wealth of experience from start-up to advisory within StatPro’s marketplace, supporting the growth strategy with the appropriate level of formalityand governance.

JOINED STATPRO: 2000Carl, 53, previously worked as Director of Risk Control and Performance at F&C Investment Management Limited and prior to that was Vice President – Head of Performance at J P Morgan Investment Management Inc. He is a founder member of both the Investment Performance Council and GIPS®, member of the GIPS Executive Committee and a member of the Advisory Board of the Journal of Performance Measurement. Carl is a director of the Freedom Index Company and is also the author of ‘Practical Portfolio Performance Measurement & Attribution’ and ‘Practical Risk-adjusted Performance Measurement’.

JOINED STATPRO: FOUNDER, 1994Justin, 51, began his career in 1989 as a salesman with Micropal, a provider of independent information on mutual funds. He set up an agency for Micropal in 1991 in Switzerland and grew the business to cover France and Luxembourg. In 1994, he founded StatPro, floating the business in May 2000 raising £5 million to build up StatPro’s international expansion. StatPro´s revenues have grown from under £3 million to over £30 million since 2000. He has day-to-day responsibility for the Group.

JOINED STATPRO: 2000 Prior to joining StatPro, Andrew, 54, was Group Financial Controller at William Baird PLC and has previously held senior finance roles at De La Rue plc and Deloitte & Touche. He is a Fellow of both the ICAEW and the Association of Corporate Treasurers (ACT) and served for three years on the ACT’s governing council. Andrew is responsible for the global finance function at StatPro. Andrew was appointed Company Secretary in 2012. In 2012, Andrew was awarded a ranking in the ‘Hot 20 FDs’ in the TMT sector by BDO LLP.

JOINED STATPRO: 2002 Mark, 53, was previously Managing Director of Standard & Poor’s Fund Services. Mark co-founded Micropal, the global fund performance analysis company in 1986, becoming their Sales & Marketing Director in 1987. In 1992 he became Managing Director of Micropal, and subsequently in 1997 negotiated the sale of Micropal to Standard & Poor´s, a division of the McGraw-Hill Companies. Between 1999 and 2001, Mark was Managing Director of Standard & Poor’s Fund Services. Mark chairs the Group’s Nominations Committee.

JOINED STATPRO: 2009Stuart, 68, has been employed in the financial information industry since 1968. From 1995 to 2009 Stuart held various senior positions at IDC. As President and CEO from 2000, Stuart led the business through nine years of continuous and strong growth, with revenues more than doubling to US$750 million and with profitability and cash flow growing more than threefold. IDC consistently outperformed the market in growth over that period and, at around 30%, had close to the highest EBITA margin amongst major comparable players in its industry. Stuart was also non-executive chairman of Ipreo Holdings LLC, a New York based, leading provider of deal execution platforms, market intelligence and investor communication tools until August 2014, when the business was sold. Stuart is the Senior Independent Director and chairs the Group’s Remuneration Committee.

JOINED STATPRO: 2012Jane, 68, began her career with IBM, after which she was CEO of Softwright Systems Ltd., taking it from start-up to trade sale. Jane has since held a portfolio of non-executive directorships including quoted technology companies, investment trusts, the John Lewis Partnership, the DWP and the MoJ, and technology start-ups. Jane is currently the Senior Independent Director at F&C Global Smaller Companies plc, and a non-executive director of Nominet Ltd, JP Morgan Income & Growth plc, Asthma UK and her local Citizen’s Advice Bureau. She is also a member of the Warwick Business School Advisory Board. Jane was awarded an MBE for services to the IT sector in 1991, and an OBE for services to the public service and voluntary sector in 2009. Jane is an Independent Director and chairs the Group’s Audit Committee.

3534


GROUP EXECUTIVE BOARD

Dario CintioliManaging DirectorDario joined StatPro in 2003 following StatPro’s investment in RiskMap. Dario was the original creator of StatPro Risk Management. He is an expert in risk management, fixed income attribution and reporting techniques, including ‘Value at Risk’, which provides a monetary measure of the risk of a portfolio. Before establishing RiskMap and joining StatPro, Dario spent ten years in leading Italian financial institutions, as Head of Interest Rate Derivatives and Head of Quantitative Analysis. Today Dario is responsible for all StatPro’s products including software and data services as well as sales, client services, marketing and IT.

Andrew PeddarGroup Chief Operating OfficerAndrew joined StatPro’s UK office in 1999, as a Project Manager, and became Client Services Manager for the UK region in 2002. In March 2004, Andrew moved to Cape Town, where he co-founded StatPro South Africa as Managing Director. Following four successful years in the Cape Town office he moved to StatPro Canada, based in Toronto. In January 2011, he became CEO, North America with overall responsibility for the region. At the beginning of 2013 Andrew took up his current position.

Michel LempickiGlobal Accounts DirectorPreviously working for Standard & Poor’s, Michel joined StatPro in 1998 to open our European operations in Benelux, France and Germany. He was involved in the acquisition of AMS in Paris and RiskMap in Italy, which later became StatPro Italy. In 2010, Michel became the European Sales Director and moved to his current role in 2013. Michel manages and nurtures global strategic accounts within StatPro. This includes large fund administration and custodian banks, along with third parties that wish to resell StatPro services to their clients.

Neil SmythMarketing & Technology DirectorNeil is responsible for the overall technology strategy and global marketing activity. He joined StatPro in 1997. Neil has held positions in QA, Client Services and IT and was the CTO before taking up his current position in January 2011. Neil started the research project which became StatPro Revolution in 2008, leading an initial group of architects and developers to produce prototypes and public betas ready for the commercial launch in March 2011. Neil continues to be part of the StatPro Revolution product strategy group today.

Marc ZandtGlobal Services DirectorMarc has worked within the financial services industry for over 20 years. He started his career working for Arthur Andersen, Rothschild Asset Management and Insight Investment. His experience on the buy-side has given him a deep appreciation for the challenges faced within the industry. Marc joined StatPro South Africa in 2008, initially as an Account Manager, later becoming CEO, South Africa. In 2013, Marc became Global Services Director, based in London, responsible for managing all our services with our clients.

Damian HandzyGlobal Head of RiskDamian is co-founder and former CEO of New York based Investor Analytics, which he sold to StatPro in January 2016. Damian is an industry expert in risk management, having brought several innovations, including VisualVaR, to market. He is a recognised thought leader in risk analytics, a sought-after keynote speaker, a faculty member of the International Institute for Analytics and author of the Riskology column in Risk Magazine’s Hedge Funds Review. Damian has a doctorate in nuclear astrophysics and as StatPro’s Global Head of Risk is responsible for the firm’s risk strategy and delivery.

Luca BortolamiRevolution DirectorLuca Bortolami joined StatPro Italy in 2008. Prior to joining StatPro, Luca worked for 15 years as a structured derivatives trader for the three major Italian Banks, ultimately becoming the Global Head of Structured Fixed Income Derivatives at UniCredit. After spending four years in Milan working on StatPro’s risk operations, Luca moved to StatPro Canada in 2012 to become the Head of the Montreal office and Global Head of Evaluations. At the beginning of 2015, he became Revolution Product Director, one year before joining the GEB in his current role. His academic background is both in technology and finance, holding a Bachelor of Science in Computer Science from Worcester Polytechnic Institute and an MBA from Cornell University.

The Group Executive Board is made up of the following directors who manage specific functions globally.

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PLC BoardCarl Bacon CIPM, Non-Executive ChairmanJustin Wheatley, Group Chief ExecutiveAndrew Fabian FCA FCT, Group Finance DirectorMark Adorian, Non-Executive DirectorStuart Clark, Non-Executive DirectorJane Tozer MBE OBE, Non-Executive Director

AuditCommittee

Jane Tozer – ChairmanMark AdorianStuart ClarkCarl Bacon

RemunerationCommittee

Stuart Clark – ChairmanMark AdorianCarl BaconJane Tozer

NominationsCommittee

Mark Adorian – ChairmanCarl BaconJane TozerStuart Clark


CORPORATE GOVERNANCEINTRODUCTION TO CORPORATE GOVERNANCE

The Board oversees the Company’s financial reporting, risk management and regulatory compliance functions. It also sets executive remuneration and oversees executive appointments. These roles are fulfilled by the Board and its three committees shown below. The Board and its committees meet regularly, discuss matters by ‘phone when necessary, and circulate minutes and relevant papers in advance of each meeting.

My aim as Chairman is to create a diverse, inclusive and effective Board, which is fully informed about the business and able to provide the executive membership with an appropriate balance of challenge and support. My relationship with our CEO and our interaction with the non-executive directors is of key importance for a climate of open communication and constructive debate. I run annual Board evaluations, which provide useful feedback to drive improvements in the Board’s and committees’ work.

Compliance with the UK Corporate Governance CodeYour Company is listed on the Alternative Investment Market of the London Stock Exchange (‘AIM’), so the Company is not required to adopt the UK Corporate Governance Code, which applies only to fully listed companies. Nevertheless, the Company is committed to high standards of corporate governance and the Board is accountable to the Company’s shareholders. This statement describes how the Company applies the principles of good corporate governance.

The workings of the Board and its committeesThe BoardThe Board comprises the Non-Executive Chairman, the Group Chief Executive, the Group Finance Director and three other non-executive directors. It is responsible to shareholders for the proper management of the Company. Directors’ biographies appear on pages 32 to 33 and demonstrate their range of relevant experience, bringing independent judgement to bear on issues of strategy, performance, resources, industry knowledge and standards of conduct.

All directors have access to the Company Secretary, who is responsible for company secretarial matters and compliance with relevant statutory obligations. All directors have access to training to enable them to comply with their duties as a director.

To enable the Board to discharge its duties, all directors have full and timely access to all relevant information. The Board meets at least quarterly and has adopted a formal schedule of matters specifically reserved for decision by it, thus ensuring that it exercises control over appropriate strategic, financial, operational and compliance issues. At its meetings the Board reviews trading performance, ensures adequate financing, sets and monitors strategy, examines investment and acquisition opportunities and discusses reports to shareholders. The directors can also take independent professional advice as appropriate at the Company’s expense. The Chairman meets at least once a year with the non-executive directors without the executive directors present.

The performance of the executive directors is reviewed annually by the non-executive directors. On resignation from the Board a non-executive director would be invited to provide a written statement to the Chairman for circulation to the Board, if he or she were to have any unresolved concerns about the running of the Company. The overall effectiveness of the Board and its sub-committees is reviewed by the Board as a whole through annual completion and discussion of a questionnaire.

The Board believes that the level of sales consulting to promote StatPro Revolution provided by Mark Adorian in recent years, in addition to his substantial shareholding, means that he may no longer be considered independent under the UK Corporate Governance code, although the Board believes that Mark Adorian is independent of mind

and continues to act in the interests of all shareholders.

Stuart Clark is the Senior Independent Director and is available to the shareholders for any concerns which have not been resolved by contact with the Chairman, Chief Executive or other executives, or for which such contact is inappropriate.

Audit CommitteeThe Audit Committee is chaired by Jane Tozer. The Audit Committee also comprises the Chairman (Carl Bacon), Mark Adorian and Stuart Clark, and meets at least three times annually. The Audit Committee receives reports from the Group’s external auditors and its meetings are also attended, by invitation, by the Group Finance Director.

The Audit Committee reviews the Company’s financial matters, as set out in written terms of reference, including the interim results and the Annual Report and Accounts, before their submission to the Board. It monitors the controls in force to ensure the integrity of financial information reported to shareholders.

The Audit Committee reviews the appointment of external auditors, discusses the nature and scope of the audit and reviews the external auditor’s remuneration both for audit and non-audit work. The Audit Committee assesses annually the qualification, expertise and resources, the independence of the external auditors, and the effectiveness of the audit process.

The Audit Committee reviews the whistleblower policy and process for staff and receives reports on all issues raised through this process.

Remuneration and Nominations CommitteesThe Remuneration Committee is chaired by Stuart Clark, and is responsible for determining the contract terms, remuneration and other benefits for executive directors, including performance-related bonus schemes and participation in the Group’s Long Term Incentive Scheme. The other members of the Remuneration Committee are Carl Bacon, Mark Adorian and Jane Tozer.

The Remuneration Report, which includes details of directors’ remuneration, pension entitlements and directors’ interests, together with information on service contracts is set out on pages 43 to 46.

Mark Adorian is the chairman of the Nominations Committee, and the other committee members are Carl Bacon, Stuart Clark and Jane Tozer. The Nominations Committee reviews and nominates appointments to the Board. All such appointments are then reviewed and approved by the full Board.

This section of our Annual Report explains how the Board and each of its committees function.

Carl BaconChairman

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Board meeting attendance Six scheduled Board meetings were held in 2015. During the year, there were three Audit Committee meetings, four Remuneration Committee meetings and there was one Nominations Committee meeting. The number of scheduled Board meetings and sub-committee meetings attended by each director during the year are shown in the Attendance table below.

Group Executive BoardThe Group Executive Board (‘GEB’) is the executive committee, which comprises the executive directors and other senior executives of the Group who meet at least ten times per year to discuss strategic and operational matters. Regional executive boards and product-focused committees have been established to deal with other executive matters within clearly defined terms of reference established by the Board.

The members of the Group Executive Board during 2015 and their roles and responsibilities are:

Justin Wheatley Group Chief ExecutiveAndrew Fabian Group Finance DirectorDario Cintioli Managing Director Andrew Peddar Group Chief Operating OfficerMichel Lempicki Global Accounts DirectorNeil Smyth Marketing and Technology DirectorMarc Zandt Global Services Director

In January 2016, Damian Handzy was appointed to the Group Executive Board as Global Head of Risk following the acquisition of Investor Analytics where he was previously CEO. Also, in February 2016, Luca Bortolami was appointed to the Group Executive Board as Revolution Director responsible for managing the development and data teams within StatPro.

The Group Executive Board has the following sub-committees:Regional BoardsEMEAA Region (Europe, South Africa and Asia Pacific) and North American RegionOperational decisions on implementing the Group’s strategy, including sales and client services strategy and expenditure and recruitment plans, are delegated to senior executives in the Group’s regions, within clearly defined terms of reference and overall budgets established by the Board.

Product strategyOperational decisions on implementing the Group’s product strategy including development plans and related expenditure and recruitment plans are delegated to the Product Director who works with other senior executives on product-focused committees, within clearly defined terms of reference and overall budgets established by the Board.

Relations with shareholdersCommunications with shareholders are very important. There is a regular dialogue with institutional shareholders and market analysts, including presentations after the Company’s preliminary announcement of the annual and interim results and any other major announcements.

Internal controls and risk management During the year, the Board has formally reviewed the Group’s risk profile and reported on the effectiveness of the Group’s system of internal controls and management of Group risk. This review addresses internal financial controls and other risks and controls of the business. The directors acknowledge that they are responsible for the Company’s system of internal control, which is designed to manage rather than eliminate business risks and which provides reasonable but not absolute assurance against material mis-statement or loss.

The Company has established risk management procedures which the Board considers appropriate to a group of StatPro’s size and complexity. During the year the risk management procedures were reviewed by the directors. This is achieved through a series of reports and meetings of specific committees including the Information Security Committee. The Company has a Group Risk Manual, which sets out the key risks and the controls in place to manage these risks, and identifies actions to be taken to eliminate or mitigate risks as appropriate.

Each senior executive is responsible for managing risks in his or her area of responsibility, and making regular reports on risk issues to the main Board, Audit Committee and the Group Executive Board. This risk analysis is embedded in risk review meetings in the Group Executive Board, and covers all business risks including commercial, financial, operational, legal and environmental risks. These reports include the potential impact to the business of each key risk and its likelihood of occurrence, plus details of mitigating actions and insurance policies including specific cover for the Company and/or its directors.

Recommendations on internal controls and risk improvement are reviewed by the Audit Committee and the Board.

A statement of the directors’ responsibilities in respect of the financial statements is set out on pages 40 to 41 and a statement on going concern is below.

Financial controlsThe Group has established written expenditure approval, delegation of authority and authorisation levels, segregation of duties and other control procedures including accounting policies and procedures.

Budgetary process Each year the Board approves the annual budget and key risk areas are identified. Performance is monitored and relevant action is taken throughout the year through regular reporting to the Board of variances from the budget, updated forecasts for the year and information on the key risk areas.

Investment appraisal Major capital and other project expenditure is controlled by a budgetary process and authorisation levels set by the Board. For capital expenditure above specified levels, and for acquisitions and disposals, detailed written proposals must be submitted to the Board for approval.

Internal audit The Group currently does not have an internal audit function as the directors consider this to be inappropriate given the size of the Group. However, this is reviewed by the Board annually.

Going concernAfter making appropriate enquiries and for the reasons set out in the Directors’ Report, the directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing these financial statements (see note 1).

CORPORATE GOVERNANCE(CONTINUED...)

Attendance tableScheduled Board

meetingsAudit Committee

meetingsRemuneration Committee

meetingsNominations Committee

meetings

Carl Bacon 6/6 3/3 4/4 1/1Justin Wheatley 6/6Andrew Fabian 6/6Mark Adorian 6/6 3/3 4/4 1/1Stuart Clark 6/6 3/3 4/4 1/1Jane Tozer 6/6 3/3 4/4 1/1

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DIRECTORS’ REPORTFOR THE YEAR ENDED 31 DECEMBER 2015

Going concernAfter making appropriate enquiries, the directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. For these reasons, they continue to adopt the going concern basis in preparing the Group’s financial statements (see note 1).

Future developments Future development for the business are covered in the Strategic Report on pages 1 to 31.

Research and development The Group continues to invest in developing improved software products and services. Development expenditure incurred during the year was £4.93 million (2014: £4.99 million). In accordance with International Financial Reporting Standards (‘IFRS’), development costs are capitalised where recognition criteria are met and written off over the useful life, currently estimated by the directors to be three years. The amount capitalised in the year was £4.05 million (2014: £3.62 million) and the total amount of amortisation was £3.54 million (2014: £3.35 million).

Results, dividends and transfers to reservesThe Group’s profit attributable to equity shareholders for the financial year was £1.62 million (2014: £1.60 million). A final dividend of 2.05p per ordinary share (2014: 2.05p) has been recommended by the directors taking the total dividend for the year to 2.9p (2014: 2.9p). If approved by the passing of a resolution at the 2016 Annual General Meeting, it is intended to pay the final dividend on 25 May 2016 to all shareholders on the register at close of business on 29 April 2016 (ex-div date will be 28 April 2016). The profit for the year has been transferred to reserves.

Shares issued in yearDuring 2015 the Company issued 106,000 shares (2014: 4,000) as detailed in note 20 to the financial statements. There were 225,000 shares held in treasury at 31 December 2015 (2014: 225,000). At the forthcoming Annual General Meeting, the directors are seeking to renew the authority to allow the purchase of own shares up to a limit of 10% of the Company’s share capital.

Financial instrumentsThe Group’s financial instruments comprise cash, money market deposits, banks loans, provisions, derivatives financial instruments and various other accounts receivables and payables that arise directly from its operations. These financial instruments are described in Note 18.

Directors and their interestsThe directors who held office during the year were:

Carl Bacon Non-Executive ChairmanJustin Wheatley Group Chief ExecutiveAndrew Fabian Group Finance DirectorMark Adorian Non-Executive DirectorStuart Clark Non-Executive DirectorJane Tozer Non-Executive Director

All directors are subject to election at the first opportunity after their appointment, and then to re-election at intervals of no more than three years in accordance with the Company’s Articles of Association. The Company’s Articles of Association require that one third of the directors, or the number nearest to one third, are to retire from office by rotation. Stuart Clark has decided not to stand for re-election at the forthcoming Annual General Meeting and accordingly, Jane Tozer and Justin Wheatley seek re-election at this year’s AGM. Having each served on the Board for more than nine years, Carl Bacon and Mark Adorian are also voluntarily seeking re-election at the AGM.

Directors’ interests in the Company’s share capital and share options are detailed on pages 45 to 46.

Directors’ interests in significant contractsDirectors’ interests in significant contracts are described in note 21 to the financial statements.

Directors’ responsibilities statementThe directors are responsible for preparing the Directors’ Report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the

directors have elected to prepare the Group and Company financial statements in accordance with International Financial Reporting Standards as adopted by the European Union. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and the Company and the profit or loss of the Group for that period.

In preparing these financial statements, the directors are required to:• select suitable accounting policies and then apply them

consistently;• make judgements and accounting estimates that are

reasonable and prudent;• state whether applicable IFRSs adopted by the European

Union have been followed, subject to any material departures disclosed and explained in the financial statements; and

• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and Company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group and Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Group and Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Group and Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Directors’ indemnity insuranceThe Company carries an appropriate level of professional indemnity insurance cover for the size of the business and also has insurance cover for Directors’ and Officers’ liability.

Disclosure of information to auditorsEach director has confirmed that:• so far as the director is aware, there is no relevant audit

information of which the Group’s auditors are unaware; and

• he or she has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the Group’s auditors are aware of that information.

This confirmation is given in accordance with Section 418 of the Companies Act 2006.

Substantial shareholdingsThe Company has been notified of the following disclosable holdings of voting rights in the Company’s issued share capital as at 26 February 2016:

Number of

shares% of share

capital

Liontrust Asset Management 12,843,304 19.0%Herald Investment Management 7,657,784 11.3%Justin Wheatley 7,433,672 11.0%AXA Framlington 7,388,750 10.9%Stichting Bewaarder GFC

(Depository of Gran Fondo Capital) 6,083,218 9.0%Brown Brothers Harriman & Co 3,423,273 5.1%Mark Adorian 2,970,698 4.4%

In addition to the above holdings, Justin Wheatley holds 276,016 ordinary shares (representing 0.4% of the ordinary share capital) in a family trust, being a trustee and potential indirect beneficiary of the trust.

The directors present their Annual Report and the audited financial statements for the year ended 31 December 2015.

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REMUNERATION REPORT

Employment policiesThe Group acknowledges the vital role that all employees play in its success through their skills, initiative and commitment. All operations are encouraged to provide the proper resources to maximise this potential through efficient systems of recruitment, communication, training and development. It is the Group’s policy to give full and fair consideration to the employment and career development of disabled persons, commensurate with their aptitudes and abilities. The Group’s policy in respect of staff who become disabled whilst employed is to make appropriate adjustments and to assist them wherever possible to continue employment within the Group. The Group is also committed to providing equal opportunities regardless of age, gender, religion or ethnic origin.

The Group ensures that all employees are kept fully informed, as far as it is practicable, with regard to the activities of the Group, by circulation of news and regular meetings between directors, managers and other employees. The London office of StatPro, the Group’s head office and base of UK operations, retains its Investors in People (‘IIP’) award in recognition of the investment the Company has made in its people. The award reflects our commitment to and belief in the value of our staff, their performance and their contribution to the success of the business.

Corporate Social ResponsibilityThe Group made charitable donations for educational purposes during the year of £52,000 (2014: £42,000), the main component of which related to scholarships and sponsorships to students from disadvantaged backgrounds to various educational establishments in South Africa.

StatPro’s new London headquarters maintains the Low Carbon Workplace Standard under the Carbon Trust scheme which encourages businesses to reduce their carbon footprint.

Health and safetyThe Group’s policy is to ensure that, as far as is reasonably practicable, working environments exist which will minimise risk to the health and safety of employees.

Legal formThe Company is a public limited company, incorporated and domiciled in England and Wales. The Company’s Registration number is 2910629.

AuditorsA resolution to re-appoint Ernst and Young LLP as independent auditor to the Company will be proposed at the Annual General Meeting.

By order of the Board

Andrew FabianCompany Secretary11 March 2016

Stuart Clark is the Chairman of the Remuneration Committee and the other members of the committee are Carl Bacon, Mark Adorian and Jane Tozer. The remuneration of all executive directors and other senior executives is recommended to the Board by the Committee. The remuneration of the non-executive directors is determined by the Board.

Remuneration policyThe Group’s policy is to attract, retain and motivate high calibre executives by rewarding them with remuneration packages which reflect both individual performance and the results of the operations under their control. Packages consist of basic salary, performance-related bonuses, share options, pensions and other benefits, with a proportion of potential remuneration based upon achievement of demanding performance targets. Details of the remuneration package of each director are set out on pages 44 and 45.

The Group has implemented a remuneration policy to align the executives’ interests with the objectives of all shareholders. The current focus is on the execution of the cloud strategy, and the achievement of revenue growth for StatPro Revolution.

Basic salary and benefitsSalaries are established by reference to prevailing market rates, adjusted to reflect individual performance, experience, responsibilities and skills.

Non-executive feesThere were no changes to fee arrangements for non-executive directors during 2015.

Annual performance-related bonus schemeIn addition to basic salary, executive directors and other senior executives participate in an annual performance-related bonus scheme. Performance targets are designed to both stretch and encourage individuals whilst aligning their interests to that of the Group.

In 2015, the targets for performance-related bonuses for main Board executive directors related to the Group’s revenue growth rate for StatPro Revolution, combined with

satisfactory profit generation. The Committee may also award individual discretionary bonuses. In 2015, there were no discretionary awards. Bonuses do not form part of pensionable earnings.

Long Term Incentive PlanThe committee reviewed the LTIP arrangements in 2014 for the senior executive team in consultation with external advisers and institutional shareholders and, in conjunction with professional and legal advice, and as a result, the Remuneration Committee implemented a new incentive plan. The plan is a Performance Share Plan (‘PSP’), which consists of awards of nil cost options, primarily to executives who are on the Group Executive Board.

There are performance criteria associated with an award, linked to eps growth above a certain level (i.e. non-market performance criteria). The performance level will affect the proportion of shares that are awarded at the end of the vesting period. There will be a potential further one year holding for a proportion of the award.

The scheme is managed by a third party (Kleinwort Benson, Jersey), who has established an Employee Benefit Trust and the plan is to buy shares in the market over the vesting period rather than issue new shares. The shares held in the Trust would not be entitled to dividends.

The PSP was approved by the shareholder general meeting on 26 February 2015 and the first awards were made in March 2015. The vesting period for the first awards are three and four years.

Details of the options outstanding under the schemes are provided in note 20 to the financial statements.

Pensions and other benefitsThe Company also operates a defined contribution pension scheme for executive directors. Other benefits include allowances, life assurance and membership of a private healthcare scheme.

Service contractsEach of the executive directors has a rolling contract of service, which is terminable by no more than 12 months’

DIRECTORS’ REPORTFOR THE YEAR ENDED 31 DECEMBER 2015(CONTINUED...)

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notice. In the event of termination of a service contract, compensation amounting to the notice period would be payable. Details of service agreements for each executive director are as follows:

Date of service agreement Notice period on termination

Justin Wheatley 31 December 2012 6 monthsAndrew Fabian 10 July 2000 12 months

StatPro International Sarl entered into a new employment contract with Justin Wheatley on substantially the same terms as his previous employment contract with effect from 1 January 2013. Justin Wheatley is currently on secondment to StatPro Inc.

Non-executive directors do not have service contracts.

Stuart Clark has decided not to stand for re-election at the forthcoming Annual General Meeting and accordingly, Jane Tozer and Justin Wheatley seek re-election at this year’s AGM. Having each served on the Board for more than nine years, Carl Bacon and Mark Adorian are also voluntarily seeking re-election at the AGM. Biographical details of all directors can be found on pages 32 to 33.

Performance graph

31 December 2010 = 100

In the opinion of the directors, the FTSE™ AIM index is the most appropriate benchmark for total shareholder return comparatives. For the five-year period from 31 December 2010 to 31 December 2015 the total shareholder return for StatPro was -22%. Over the same period the FTSE™ AIM total shareholder return was -21%.

Directors’ remuneration

2015Salary/Fees

£’000s

Performance-related

bonus£’000s

Discretionary bonus

£’000sBenefits*

£’000s

Total excluding pensions

£’000sPensions

£’000sTotal 2015

£’000s

Carl Bacon 45 – – – 45 – 45Justin Wheatley 229 – – 108 337 – 337Andrew Fabian 158 – – 10 168 16 184Mark Adorian 35 – – – 35 – 35Stuart Clark 39 – – – 39 – 39Jane Tozer 40 – – – 40 – 40

546 – – 118 664 16 680

REMUNERATION REPORT(CONTINUED...)

2014Salary/Fees

£’000s

Performance-related

bonus£’000s

Discretionary bonus

£’000sBenefits*

£’000s

Total excluding pensions

£’000sPensions

£’000sTotal 2014

£’000s

Carl Bacon 45 – – – 45 – 45Justin Wheatley 212 35 – 103 350 – 350Andrew Fabian 155 40 – 10 205 20 225Mark Adorian 35 – – – 35 – 35Stuart Clark 36 – – – 36 – 36Jane Tozer 40 – – – 40 – 40

523 75 – 113 711 20 731

*Benefits in kind for Justin Wheatley and Andrew Fabian relate to travel and car allowances, private healthcare and life assurance.

Carl Bacon and Mark Adorian performed some consultancy services during 2015 for the Company as detailed in note 21.

Justin Wheatley and Stuart Clark receive their remuneration in US dollars. The US dollar amounts for salary/fees were the same in 2014 and 2015. The sterling amounts, in the tables above, fluctuated due to the foreign exchange.

Directors’ pension arrangements The table below shows directors’ pension arrangements in respect of a defined contribution scheme.

Contribution Rate

Relevant Salary

£’000s

Contributions 2015

£’000s

Contributions 2014

£’000s

Andrew Fabian 10% 158 16 20

StatPro operates a pension salary sacrifice arrangement where individuals can exchange their salary for Company paid pension contributions. Where individuals exchange salary this reduces StatPro’s National Insurance contributions. For executive directors, StatPro credits this saving to the individual’s pension. As part of Justin Wheatley’s new service agreement, Justin Wheatley has opted to swap pension benefits for other allowances and therefore, he received no pension contribution from the Company in 2015 or 2014.

Directors’ interestsInterests in shares

As at31 December

2015Number

As at31 December

2014Number

Carl Bacon 829,000 829,000Justin Wheatley 7,433,672 7,433,672Andrew Fabian 264,647 264,647Mark Adorian 2,970,698 2,956,148Stuart Clark 90,000 90,000Jane Tozer 24,752 24,752

In addition to the above interests, Justin Wheatley has an interest in 276,016 ordinary shares (2014: 307,580) in a family trust, being a trustee and potential beneficiary of the trust.

120

60Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Dec 15

105

90

75

— StatPro Group plc— FTSE AIM All Share

46


Interests in share options As at

31 December2014

Number

Granted in year* Number

Exercised in year*

Number Lapsed in year

Number

As at 31 December

2015Number

Exercise price

pence Exercise period

Justin Wheatley 45,000 – – (45,000) – 100 2011–2015*1,000,000 – – – 1,000,000 108 2016–2022*

1,045,000 – – (45,000) 1,000,000

Andrew Fabian 35,000 – – (35,000) – 100 2011–2015*35,000 – – – 35,000 135 2013–2017*

150,000 – – – 150,000 108 2016–2022*100,000 – – – 100,000 108 2016–2019*

320,000 – – (35,000) 285,000

Interests in PSP share awards

Andrew Fabian – 40,000 – – 40,000 2018*– 40,000 – – 40,000 2019*

– 80,000 – – 80,000

* Performance criteria are attached to these options/awards.

Gains made by directors on share options No directors exercised any options in 2015 and in 2014.

Share priceThe highest and lowest mid-market prices of the Company’s ordinary shares during the year were 86.5p and 69.25p respectively, and the mid-market price on 31 December 2015 was 77p.

This report was approved by the Board on 11 March 2016.

Stuart ClarkChairman of Remuneration Committee 11 March 2016

REMUNERATION REPORT(CONTINUED...)

47

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF STATPRO GROUP PLC

We have audited the financial statements of StatPro Group plc for the year ended 31 December 2015 which comprise Group Income Statement, Group Statement of Comprehensive Income, Group Balance Sheet, Company Balance Sheet, Group and Company Statements’ of Cash Flows, Group Statement of Changes in Shareholders’ Equity, Company Statements of Changes in Shareholders’ Equity and the related notes 1 to 28. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union and, as regards the parent Company financial statements, as applied in accordance with the provisions of the Companies Act 2006.

This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of directors and auditorAs explained more fully in the Directors’ Responsibilities Statement set out on pages 40, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s Ethical Standards for Auditors.

Scope of the audit of the financial statementsAn audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the Group’s and the parent Company’s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the Annual Report and Accounts to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

Opinion on financial statementsIn our opinion:• the financial statements give a true and fair view of the state of the Group’s and of the parent Company’s affairs as at

31 December 2015 and of the Group’s profit for the year then ended;• the Group financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union; • the parent Company financial statements have been properly prepared in accordance with IFRSs as adopted by the

European Union and as applied in accordance with the provisions of the Companies Act 2006; and• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.

Opinion on other matter prescribed by the Companies Act 2006In our opinion the information given in the Strategic Report and the Directors’ Report for the financial year for which the financial statements are prepared is consistent with the financial statements.


4948

GROUP INCOME STATEMENTFOR THE YEAR ENDED 31 DECEMBER 2015

Matters on which we are required to report by exceptionWe have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:• adequate accounting records have not been kept by the parent Company, or returns adequate for our audit have not been

received from branches not visited by us; or• the parent Company financial statements are not in agreement with the accounting records and returns; or• certain disclosures of directors’ remuneration specified by law are not made; or• we have not received all the information and explanations we require for our audit.

David Wilson (Senior Statutory Auditor)for and on behalf of Ernst & Young LLP, Statutory AuditorLondon11 March 2016

Notes:1 The maintenance and integrity of the StatPro Group plc website is the responsibility of the directors; the work carried out by the auditors does not

involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the website.

2 Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF STATPRO GROUP PLC (CONTINUED...)

Notes2015

£’000s2014

£’000s

Revenue 2 30,187 32,018

Operating expenses before amortisation of intangible assets and exceptional items (23,722) (25,529)Amortisation of acquired intangible assets 11 (32) (188)Amortisation of other intangible assets 11 (3,734) (3,640)

Operating expenses 3 (27,488) (29,357)

Operating profit 2,699 2,661

Finance income 6 9 12Finance expense 6 (299) (303)

Net finance expense (290) (291)

Profit before taxation 2 2,409 2,370

Taxation 7 (788) (774)

Profit for the year 1,621 1,596

Earnings per share – basic 10 2.4p 2.4pEarnings per share – diluted 10 2.4p 2.4p

GROUP STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2015

2015£’000s

2014£’000s

Profit for the year 1,621 1,596Other comprehensive income to be reclassified to the income statement:Net exchange differences (4,012) (946)

Total comprehensive (loss)/income for the year (2,391) 650


5150

STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2015

BALANCE SHEETS AT 31 DECEMBER 2015

Notes

Group2015

£’000s

Group2014

£’000s

Company2015

£’000s

Company2014

£’000s

Non-current assetsGoodwill 11 42,460 46,724 – –Other intangible assets 11 6,153 5,822 60 511Property, plant and equipment 12 2,233 2,470 – –Other receivables 14 147 109 14,602 15,781Deferred tax assets 17 807 988 6 –Investments 13 – – 43,494 43,385

51,800 56,113 58,162 59,677Current assetsTrade and other receivables 14 8,264 7,722 14 123Financial instruments – other 18 – 27 – 27Current tax assets 198 – – –Cash and cash equivalents 2,203 2,692 224 897

10,665 10,441 238 1,047LiabilitiesCurrent liabilitiesFinancial liabilities – borrowings 18 (118) (12) – –Financial instruments – other 18 (41) (15) (41) (15)Trade and other payables 15 (4,654) (6,088) (12,709) (15,945)Current tax liabilities (1,106) (828) (616) (227)Deferred income (13,217) (12,603) – –Provisions 16 (642) (725) (642) (676)

(19,778) (20,271) (14,008) (16,863)

Net current liabilities (9,113) (9,830) (13,770) (15,816)

Non-current liabilitiesFinancial liabilities – borrowings 18 (801) – (639) –Other creditors 15 (47) (76) – –Deferred tax liabilities 17 (233) (449) (10) (84)Deferred income (89) (60) – –Provisions 16 – (13) – –

(1,170) (598) (649) (84)

Net assets 41,517 45,685 43,743 43,777

Shareholders’ equityShare capital 20 678 677 678 677Share premium 23,537 23,474 23,537 23,474Shares to be issued 63 63 63 63Treasury shares (249) (249) (249) (249)Other reserves 2,692 6,704 2,369 2,369Retained earnings 14,796 15,016 17,345 17,443

Total shareholders’ equity 41,517 45,685 43,743 43,777

The financial statements were approved by the Board of Directors on 11 March 2016 and were signed on its behalf by:

Justin Wheatley Andrew FabianDirector Director

Notes

Group2015

£’000s

Group2014

£’000s

Company2015

£’000s

Company2014

£’000s

Operating activitiesCash generated from operations 22 6,548 7,705 316 1,698Finance income 9 12 3 5Finance costs (93) (22) (81) (20)Tax paid (832) (1,173) (154) (110)

Net cash flow from operating activities 5,632 6,522 84 1,573

Investing activitiesInvestment in intangible assets 11 (4,127) (4,053) – (665)Purchase of property, plant and equipment 12 (881) (1,863) – –Proceeds from the disposal of property, plant and equipment 9 12 – –Dividends received from subsidiaries – – 500 545

Net cash flow (used in)/from investing activities (4,999) (5,904) 500 (120)

Financing activitiesNet proceeds from bank loan 639 – 639 –Net proceeds from finance leases 269 – – –Proceeds from issue of ordinary shares 20 64 2 64 2Dividends paid to shareholders 9 (1,960) (1,889) (1,960) (1,889)

Net cash flow used in financing activities (988) (1,887) (1,257) (1,887)

Net decrease in cash and cash equivalents (355) (1,269) (673) (434)

Cash and cash equivalents at 1 January 2,692 4,014 897 1,331Effect of exchange rate movements (134) (53) – –

Cash and cash equivalents at 31 December 2,203 2,692 224 897


5352

COMPANY STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY FOR THE YEAR ENDED 31 DECEMBER 2015

Share capital£’000s

Share premium

£’000s

Shares to be issued

£’000s

Treasury shares

£’000s

Other reserves

£’000s

Retained earnings

£’000s

Total equity

£’000s

At 1 January 2014 677 23,472 63 (249) 7,650 15,295 46,908

Profit for the year – – – – – 1,596 1,596Other comprehensive income – – – – (946) – (946)

Total comprehensive income – – – – (946) 1,596 650

Transactions with owners:Share-based payment transactions – – – – – 26 26Tax relating to share option scheme – – – – – (12) (12)Shares issued – 2 – – – – 2Dividends – – – – – (1,889) (1,889)

– 2 – – – (1,875) (1,873)

At 31 December 2014 677 23,474 63 (249) 6,704 15,016 45,685


Share premium

£’000s

Shares to be issued

£’000s

Treasury shares

£’000s

Other reserves

£’000s

Retained earnings

£’000s

Total equity

£’000s

At 1 January 2015 677 23,474 63 (249) 6,704 15,016 45,685

Profit for the year – – – – – 1,621 1,621Other comprehensive income – – – – (4,012) – (4,012)

Total comprehensive income – – – – (4,012) 1,621 (2,391)

Transactions with owners:Share-based payment transactions – – – – – 121 121Tax relating to share option scheme – – – – – (2) (2)Shares issued 1 63 – – – – 64Dividends – – – – – (1,960) (1,960)

1 63 – – – (1,841) (1,777)

At 31 December 2015 678 23,537 63 (249) 2,692 14,796 41,517

Other reserves include merger reserves of £2,369,000 (2014: £2,369,000) and translation reserve of £323,000 (2014: £4,335,000). The merger reserve arose on acquisitions and represents the difference between the fair value of shares issued and the nominal value of the shares. The translation reserve incorporates the gains and losses on revaluation of the net assets and liabilities of subsidiary undertakings and other currency gains and losses that are treated as part of equity.


Share premium

£’000s

Shares to be issued

£’000s

Treasury shares

£’000s

Other reserves

£’000s

Retained earnings

£’000s

Total equity

£’000s

At 1 January 2014 677 23,472 63 (249) 2,369 16,706 43,038

Profit for the year – – – – – 2,612 2,612Other comprehensive income – – – – – – –

Total comprehensive income – – – – – 2,612 2,612

Transactions with owners:Share-based payment transactions – – – – – 26 26Tax relating to share option scheme – – – – – (12) (12)Shares issued – 2 – – – – 2Dividends – – – – – (1,889) (1,889)

– 2 – – – (1,875) (1,873)

At 31 December 2014 677 23,474 63 (249) 2,369 17,443 43,777


Share premium

£’000s

Shares to be issued

£’000s

Treasury shares

£’000s

Other reserves

£’000s

Retained earnings

£’000s

Total equity

£’000s

At 1 January 2015 677 23,474 63 (249) 2,369 17,443 43,777

Profit for the year – – – – – 1,743 1,743Other comprehensive income – – – – – – –

Total comprehensive income – – – – – 1,743 1,743

Transactions with owners:Share-based payment transactions – – – – – 121 121Tax relating to share option scheme – – – – – (2) (2)Shares issued 1 63 – – – – 64Dividends – – – – – (1,960) (1,960)

1 63 – – – (1,841) (1,777)

At 31 December 2015 678 23,537 63 (249) 2,369 17,345 43,743

Other reserves are merger reserves of £2,369,000 (2014: £2,369,000). The merger reserve arose on acquisitions and represents the difference between the fair value of shares issued and the nominal value of the shares. Share-based payment transactions in reserves include a credit of £109,000 (2014: 23,000) relating to investments in subsidiaries.

GROUP STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITYFOR THE YEAR ENDED 31 DECEMBER 2015


5554

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

1 Principal accounting policies The principal accounting policies adopted in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented unless otherwise stated.

Accounting conventionThese financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) and IFRIC interpretations endorsed by the European Union (‘EU’) and those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The financial statements have been prepared under the historical cost convention modified to include the measurement of financial assets and liabilities at fair value through profit or loss. A summary of the significant Group accounting policies is set out below, together with an explanation of where changes have been made to previous policies on the adoption of new accounting standards in the year.

As permitted by Section 408 of the Companies Act 2006, the Company has not presented its own income statement or statement of comprehensive income. The profit after taxation for the financial year of the Company was £1,743,000 (2014: £2,612,000).

The Group and parent Company financial statements are presented in sterling and all values are rounded to the nearest thousand pounds (£’000s) except where otherwise indicated.

Basis of preparation – going concernThe Group operates in the asset management sector of the financial services industry and whilst many of our clients are part of banking groups most of them are relatively resilient to the challenging economic backdrop. This is because, like StatPro itself, they themselves have recurring revenue business models and, to a large extent, the services and software provided by StatPro are reasonably embedded within their core operations. StatPro has a client base of around 500 (2014: 500), which is diversified geographically and by product and with no significant client concentration. The largest client group, which comprises a number of contracts for a variety of products and in a number of territories, represents less than 6% of recurring revenue. StatPro has a level of cancellations each year but most of our contracts are multi-year agreements which roll into subsequent commitments unless written notice is given to terminate the contract. For most software contracts the annual licence fee is payable in advance and for data contracts the fees are monthly in advance. For these reasons, we have good visibility on any potential deterioration in our trading outlook and potential risks to our business.

Renewals occur throughout the year although there is a slightly greater weighting in the fourth quarter. The Board closely monitors clients that are potentially at risk of cancellation as well as the pipeline of new business.

The Group has both cash and undrawn credit facilities available to support its business operations and therefore the Board believes that the Group is well-positioned to manage the business risks. In reaching their conclusion the Board has reviewed cash flow forecasts. After making appropriate enquiries, the directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. For these reasons, the Board continues to adopt the going concern basis in preparing the Group and Company financial statements.

Critical accounting estimates and judgementsThe preparation of financial statements under IFRS requires management to make estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, therefore not necessarily equate to the actual outcome. Estimates are made by the directors based on experience and estimates believed to be reasonable expectations of future outcomes. Critical accounting estimates and judgements are made in the following areas:

• Impairment of goodwill;• Carrying value of development assets; and• Deferred tax recognition.

The accounting policies in respect of these items are set out below and further details can be found in notes 11 and 17.

Impairment of goodwillThe Group’s impairment test for goodwill and intangible assets with indefinite useful lives is based on a value in use calculation. The value in use calculation is based on a discounted cash flow model. The cash flows are derived from the budget and projections for the next five years and do not include restructuring activities that the Group is not yet committed to or significant future investments that will enhance the asset’s performance of the cash generating unit being tested. The recoverable amount is most sensitive to the discount rate used for the discounted cash flow model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes. The key assumptions used to determine the recoverable amount for the different cash generating units, including a sensitivity analysis, are disclosed further in note 11.

Carrying value of development assetsDevelopment costs are capitalised in accordance with Group accounting policy. Initial recognition is based on management’s judgement that technological and economical feasibility is confirmed, usually when a product development project has reached a defined milestone according to an established project management model. In determining the amounts to be capitalised, management makes assumptions regarding the expected future cash generation of the assets, discount rates to be applied and the expected period of the benefits.

Uncertain tax positionsThe Group establishes provisions, based on reasonable estimates, for possible consequences of audits by tax authorities of the respective countries in which it operates. The amount of such provisions is based on various factors, such as experience with previous tax audits and differing interpretations of tax regulations by the taxable entity and the responsible tax authority. Management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with an assessment of the effect of future tax planning strategies. The level of deferred tax assets recognised and potentially recognisable is disclosed in note 17.

New and amended accounting standards and interpretationsThere were no new or amended IFRS and IFRIC interpretations effective as of 1 January 2015.

Interpretations and revised standards that are not yet effective and have not been early adopted by the GroupThe following interpretations to existing standards have been published that are mandatory for the Group’s future accounting but which the Group has not adopted early. Management has not yet fully assessed the impact of these new standards.

• IFRS 9 Financial Instruments – Classification and Measurement – 1 January 2018;• IFRS 14 Regulatory Deferral Accounts – 1 January 2016;• IFRS 15 Revenue from Contracts with Customers – 1 January 2018; and• IFRS 16 Leases – 1 January 2019.

Basis of consolidation The Group financial statements consolidate the financial statements of the Company and its subsidiary undertakings all made up to 31 December each year. Subsidiaries are entities over which the Group has the power to govern the financial and operating policies generally accompanying a shareholding of more than one half of the voting rights.


5756

Revenue Revenue represents the invoiced value of goods and services, excluding value added tax, of the following:

a) Licence revenue and related software support contracts Licence revenue and software support contract income relating to obligations under contracts is recognised in the income statement over the period of the contract, on a monthly basis, from the start of the month in which the licence commences. Any balance not relating to the accounting period is carried forward as deferred income on the balance sheet.

b) Data feesData fee income is recognised in the income statement over the period of the contract, on a monthly basis, from the start of the month in which the contract commences. Any balance not relating to the accounting period is carried forward as deferred income on the balance sheet. Data overage revenue on data contracts (data revenue in excess of contracted amount) is recognised in the period that the overage was incurred.

c) Professional services revenue Income relating to consultancy projects is recognised in the income statement as a right to consideration is established as a result of performance.

d) Royalty revenue Income is recognised in the income statement as rights to consideration accrues.

Segmental reportingOperating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Group Executive Board (see note 2).

Research and development Expenditure on research and development comprises salaries and related costs of personnel involved in software programming and development activities. Development costs are capitalised where the appropriate recognition criteria in accordance with IAS 38 are met including the asset and related costs being separately identifiable, the use of the asset being technically feasible and intended and the asset being expected to generate future benefits. As a result there is an intangible asset relating to capitalised development costs (both internally developed and acquired) recognised on the Group’s balance sheet where the Board expects the benefits to be recovered through incremental revenue from future sales. The carrying values, which are analysed by product, are considered carefully by the Board and are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

Intangible assets – customer contractsCustomer contracts acquired with acquisitions are valued based on the net contribution expected to be realised over the estimated life of the contracts and discounted at an appropriate discount rate, taking into account any tax effects. The carrying values are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

Goodwill For business combinations before 1 January 2010, goodwill is calculated as the difference between the fair value of the consideration including all costs relating to the acquisition and the fair value of the Group’s share of the identifiable net assets of the acquired entity. In accordance with IFRS 3 (Revised), the calculation of goodwill relating to any acquisitions that completed after 1 January 2010 will not include any acquisition related costs. Goodwill is not amortised but is subject to annual impairment reviews. Goodwill arising on acquisitions prior to 1 January 2004 has been frozen with effect from 1 January 2004 and is no longer amortised but subject to annual impairment reviews.

Business combinationsThe results and net assets of subsidiary undertakings acquired are included in the Group income statement and balance sheet using the acquisition method of accounting from the effective date of acquisition, the date control is gained over the subsidiary. The results, and net assets of subsidiary undertakings disposed of, are included in the Group income statement and balance sheet using the acquisition method of accounting to the effective date of disposal. Income and expenditure relating to transactions between Group undertakings are eliminated on consolidation.

AmortisationThe cost of other intangible assets are amortised on a straight-line basis over the expected useful lives of the assets as follows:

Development costs internally generated – 33% per annumCustomer contracts – over the period of the contracts (between 3 and 7 years) Other intangibles – software – between 14% and 33% per annumOther intangibles – website development costs – 33% per annum Other intangibles – trademarks – 10% per annum

DepreciationThe cost of property, plant and equipment is depreciated on a straight-line basis over the expected useful lives of the assets as follows:

Improvements to short leasehold property – over the period of the lease (between 3 and 12 years)Office equipment – between 10% and 20% per annum Fixtures and fittings – between 10% and 20% per annum Computer equipment – 33% per annum

Investments Investments in subsidiary undertakings are stated at cost including estimated contingent consideration less any provisions for impairment.

Current and deferred taxation The tax expense for the period comprises current and deferred tax. The current tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Company’s subsidiaries operate and generate taxable income. Deferred taxation is recognised in respect of all temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial statements at the balance sheet date and where these transactions or events result in an obligation to pay more tax, or a right to pay less tax in the future. Temporary differences are differences between the Group’s taxable profits and its results as stated in the financial statements. Deferred taxation assets are only recognised when their recoverability is more probable than not. Deferred taxation is measured at the average tax rates that are expected to apply in the periods in which the temporary differences are expected to reverse, based on tax rates and laws that have been enacted or substantively enacted at the balance sheet date. Recognised deferred tax is measured on a non-discounted basis.

Leased assets Rentals applicable to operating leases are charged to the income statement on a straight-line basis over the term of the lease. Assets held under finance leases, which transfer to the Group substantially all the risks and benefits incidental to ownership of the leased item, are capitalised at the inception of the lease, with a corresponding liability being recognised for the lower of the fair value of the leased asset and the present value of the minimum lease payments. Lease payments are apportioned between the reduction of the lease liability and finance charges in the income statement.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015(CONTINUED...)


5958

Financial instruments Financial assetsThe Group classifies its financial assets in the following categories: fair value through profit or loss, loans and receivables, and available for sale. The classification depends on the purpose for which the financial assets were acquired. The directors determine the classification of its financial assets at initial recognition.

a) Financial assets at fair value through profit or lossFinancial assets at fair value through profit or loss are financial assets held for trading. A financial asset is classified in this category if acquired principally for the purpose of use in the short-term. Derivatives are also categorised as held for trading unless they are designated as hedges. Assets in this category are presented as current assets.

b) Loans and receivablesLoans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are presented in current assets, except for those with maturities greater than 12 months after the balance sheet date, which are presented as non-current assets.

c) Available-for-sale financial assetsThe Company does not hold any assets available for sale (other than investments in subsidiaries which are deemed to be assets available for sale).

BorrowingsBorrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost; any difference between the proceeds (net of prepaid transaction costs) and the redemption value (including interest) is recognised in the income statement over the period of the borrowings using the effective interest method. Borrowings are classified as current liabilities unless the facility is committed such that the Group has an unconditional right to defer settlement for at least 12 months from the balance sheet date.

Cash and cash equivalentsThe Group considers all bank deposits and highly liquid investments of less than three months’ maturity (which are considered to have insignificant risk to a change in value) to be cash equivalents. Bank overdrafts are excluded from cash and cash equivalents and are presented within borrowings in current liabilities on the balance sheet.

Provisions A provision is recognised when the Group has a legal or constructive obligation as a result of a past event; it is probable that an outflow of economic benefits will be required to settle the obligation; and a reliable estimate can be made of the amount of the obligation. If the effect is material, expected future cash flows are discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability.

Pensions The Group provides contributions on behalf of certain directors and employees to a defined contribution pension scheme. Contributions payable in the year are charged to the income statement.

Share-based payments In common with many high-growth technology enterprises, the Company has issued a number of share options to executives and employees. Under IFRS, the equity-settled share-based payment awards are valued at fair value at inception and this cost is recognised over the option vesting period (typically three years). As there is no readily available market price for the options the Board has used an independent model to estimate the fair value of the options. There are a number of assumptions that affect the value and the Board has carefully considered these assumptions in order to derive an appropriate charge for the cost of options (note 20). The financial effects of awards by the Company of options over its equity shares to employees of subsidiary undertakings are recognised by the Company in its individual statements as an increase in its investment in subsidiaries with a credit to equity equivalent to the IFRS 2 cost in subsidiary undertakings.

Dividend distributionDividend distribution to the Company’s shareholders is recognised as a liability in the Group’s financial statements in the period in which the dividend becomes a liability of the Company. In the case of an interim dividend this is on the payment date; for final dividends this arises on the passing of the relevant resolution at the Annual General Meeting of the shareholders.

Exceptional itemsSignificant items which are separately disclosed on the face of the income statement by virtue of their size or incidence to enable a full understanding of the Group’s financial performance.

Foreign currencies Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at the balance sheet date. All differences are taken to the income statement. The assets and liabilities of overseas subsidiary undertakings are translated at the rate of exchange ruling at the balance sheet date. The profit and loss for the year is translated at the average rate for the year. The exchange differences arising on retranslation of opening net assets are taken to other comprehensive income. The difference between the profit and loss at the average rate and closing rate are taken to other comprehensive income. All other translation differences are taken to the income statement.

2 Segmental informationThe Group’s operating segments have been determined based on the information regularly reviewed by the Group Executive Board, which has been identified as the chief operating decision maker (‘CODM’). The Group Executive Board considers the business to be split into two primary geographical markets: EMEAA and North America. Central costs relate to the expenses related to the Group’s headquarters and costs directly associated with the parent Company, which are managed by the Group management team. The external debt is held within Central.

All revenue, profit/(loss) before taxation and total assets are attributable to the principal activity of the Group, being the development, marketing and distribution of software systems and the provision of web-based portfolio analysis and asset pricing services to the global asset management industry. Segment assets represent those assets arising from the operating activities of those segments. Segment results exclude the impact of any intercompany recharges of revenues or costs. Revenue was generated in the UK of £6.6 million (2014: £6.2 million) with non-current assets held by UK entities totalling £28.9 million (2014: £30.9 million).



6160

For the year ended 31 December 2015:EMEAA£’000s

North America

£’000sCentral£’000s

Total£’000s

Revenue 19,802 10,385 – 30,187Segment expense (15,621) (9,330) (2,537) (27,488)

Operating profit/(loss) 4,181 1,055 (2,537) 2,699Finance net income/(expense) 6 (5) (291) (290)

Profit/(loss) before taxation 4,187 1,050 (2,828) 2,409

Statement of financial positionAssets 28,785 32,844 836 62,465Liabilities (13,220) (4,803) (2,925) (20,948)

Net assets 15,565 28,041 (2,089) 41,517

OtherPurchase of property, plant and equipment 392 489 – 881Net investment in intangible assets 3,926 201 – 4,127Depreciation of property, plant and equipment 569 427 – 996Amortisation of intangibles 3,455 311 – 3,766

For the year ended 31 December 2014:EMEAA£’000s

North America

£’000sCentral£’000s

Total£’000s

Revenue 20,820 11,198 – 32,018Segment expense (16,453) (10,810) (2,094) (29,357)

Operating profit/(loss) 4,367 388 (2,094) 2,661Finance net income/(expense) 3 1 (295) (291)

Profit/(loss) before taxation 4,370 389 (2,389) 2,370

Statement of financial positionAssets 29,162 36,444 948 66,554Liabilities (13,698) (5,452) (1,719) (20,869)

Net assets 15,464 30,992 (771) 45,685

OtherPurchase of property, plant and equipment 1,198 665 – 1,863Net investment in intangible assets 2,786 602 665 4,053Depreciation of property, plant and equipment 557 635 – 1,192Amortisation of other intangibles 3,504 324 – 3,828

The movement in Annualised Recurring Revenue (‘ARR’) in the year was as follows:

Annualised Recurring RevenueARR 2015

£ millionARR 2014 £ million

As at 31 December 2014 29.39 28.72Net impact of exchange rates (1.06) (0.42)

At 1 January 2015 (at December 2015 rates) 28.33 28.30

New contracted revenue 4.13 3.87Cancellations/reductions/conversions (3.76) (2.78)

Net increase 0.37 1.09

ARR at 31 December 2015 28.70 29.39

Revenue by type of service was as follows:

2015£ million

2014£ million

Change%

RevenueSoftware licences – StatPro Seven 19.49 21.65 (10%)Software licences – StatPro Revolution 5.72 3.66 56%

Software licences – Total 25.21 25.31 (0%)Data fees 3.34 3.95 (15%)

Total recurring revenue 28.55 29.26 (2%)Professional services and other revenue 1.64 2.76 (41%)

Total revenue 30.19 32.02 (6%)

Percentage of total revenue that is recurring 95% 91%

The revenue distribution profile for StatPro Revolution is as follows:

StatPro Revolution

Annualised revenue bands

Annualised revenue

2015£’000s

Number of clients

2015Number

Average revenue per

client2015

£’000s

Annualised revenue* 2014 £’000s

Number of clients

2014Number

Average revenue per

client*2014

£’000s

<£2k 73 69 1.1 146 127 1.1£2k–£10k 344 73 4.7 430 97 4.4£10k–£50k 1,812 85 21.3 1,386 62 22.4£50k–£100k 2,158 29 74.4 1,324 19 69.7>£100k 3,409 19 179.4 2,066 10 206.6

Total 7,796 275 28.3 5,352 315 17.0




6362

3 Operating expenses2015

£’000s2014

£’000s

Operating expenses relate to:Staff costs – Research and development 4,930 4,985– Other staff costs 9,633 10,962– Share-based payments 121 26– Internal development costs capitalised (note 11) (4,052) (3,615)

Total staff costs (note 4) 10,632 12,358

Depreciation of property, plant and equipment 996 1,192Amortisation of intangible assets 3,766 3,828Operating lease rentals in respect of:– Land and buildings 1,512 1,670– Other 19 57Auditors’ remuneration (see below) 199 172Other operating expenses 10,384 10,097Exchange differences (20) (17)

Total operating expenses 27,488 29,357

Auditors’ remunerationDuring the year the Group (including its overseas subsidiaries) obtained the following services from the Group’s auditor:

2015£’000s

2014£’000s

Audit of the financial statements 78 73Local statutory audits of subsidiaries 32 35

Total Group audit fees 110 108Audit-related assurance services 16 16Taxation compliance services 23 13Taxation advisory services 50 35

199 172

Adjusted profit before taxation, adjusted operating profit margin and adjusted EBITDAIn order to provide the reader of the accounts with profit measures that more clearly demonstrate the underlying business performance from year-to-year a number of adjusted profit measures are shown below.

a) Adjusted profit before taxation2015

£’000s2014

£’000s

Profit before taxation 2,409 2,370Add back: Amortisation on acquired intangible assets 32 188Add back: Share-based payments 121 26

Adjusted profit before tax 2,562 2,584

b) Adjusted operating profit2015

£’000s2014

£’000s

Operating profit 2,699 2,661Add back: Amortisation on acquired intangible assets 32 188Add back: Share-based payments 121 26

Adjusted operating profit 2,852 2,875

c) Adjusted EBITDA2015

£’000s2014

£’000s

Operating profit 2,699 2,661Add back: Depreciation of property, plant and equipment 996 1,192 Add back: Amortisation on purchased intangible assets 196 292Add back: Amortisation on acquired intangible assets 32 188Add back: Share-based payments 121 26

Adjusted EBITDA 4,044 4,359

Adjusted EBITDA margin 13.4% 13.6%

d) Gross profit margin analysisGross profit margin analysis helps us assess the profitability of incremental revenue as the business evolves into a pure cloud business and the costs drivers begin to change. As there are a number of methodologies for allocating costs, we have described how we have allocated the cost elements. The cloud segment currently has a lower margin than the non-cloud part given the investment that is being undertaken, however, the Board’s view is that, as the business grows, the inherent scalability of cloud technology will lead to greater profitability in the future.

2015 2014

Revenue 100.0% 100.0%Cost of services (38.6%) (37.7%)

Gross profit margin 61.4% 62.3%

R&D costs (4.2%) (4.2%)Sales & Marketing costs (11.3%) (11.0%)General & Administration costs (32.9%) (33.6%)

(48.4%) (48.8%)Share-based payments 0.4% 0.1%

Adjusted EBITDA 13.4% 13.6%



6564

Definition of cost category for gross margin analysis:Cost of services includes Clients Services employee salaries, Data employee salaries, Development employee salaries related to support, contractors costs, data costs, costs of software and hardware maintenance.

R&D includes the element of Development employee salaries that relates to new research and development.

Sales and marketing includes Sales and Marketing employee salaries, external marketing costs and sales commissions.

General and administration includes the Finance, HR and IT employee salaries, communications costs, occupancy costs, professional fees, travel and expenses, and other costs. These are analysed in further details below.

General and Administration costs2015 2014

Finance, HR and Administration (4.6%) (5.6%)IT and Internal projects (5.1%) (3.7%)Executive management (2.3%) (2.3%)Employee related costs including travel (5.8%) (8.3%)

(17.8%) (19.9%)

Property and communications (10.3%) (9.9%)Professional fees, insurance and other (4.8%) (3.8%)

(15.1%) (13.7%)

Total General and Administration costs (32.9%) (33.6%)

e) Free cash flow2015

£’000s2014

£’000s

Cash generated from operations 6,548 7,705Net interest paid (84) (10)Net tax paid (832) (1,173)Purchase of property, plant and equipment (881) (1,863)Investment in intangible assets (4,127) (4,053)

Free cash flow 624 606

4 EmployeesThe average number of full time equivalent employees, including executive directors, employed by the Group during the year was as follows:

2015Number

2014Number

By activity Selling, distribution and client services 130 134Research and development 80 79Operations, management and administration 32 38

242 251

The number of employees at the end of December 2015 was 236 (2014: 245). The number of full time equivalent employees directly employed by the Company was 1 (2014: 1).

2015£’000s

2014£’000s

Staff costs:Wages and salaries 12,334 13,610Share-based payments (note 20) 121 26Social security costs 1,811 1,890Other pension costs 418 447

14,684 15,973Capitalisation of internal development costs (4,052) (3,615)

Employee costs charged to income statement (note 3) 10,632 12,358

5 Directors’ emoluments Details of the remuneration of each director, pension entitlements and share options are included in the Remuneration Report on pages 44 to 46. For the remuneration of key management personnel see note 21.

6 Net finance costs2015

£’000s2014

£’000s

Bank interest receivable 9 12Bank interest payable (155) (106)Amortisation of arrangement fees (144) (197)

Net finance expense (290) (291)

7 Taxation 2015

£’000s2014

£’000s

Current taxCurrent tax on profits for the year (1,223) (1,303)Adjustments in respect of prior years 272 (125)

Total current tax (951) (1,428)

Total deferred tax 163 654

Income tax expense (788) (774)

The portion of exchange differences taken to equity as shown in the Group Statement of Comprehensive Income that has a tax impact solely relates to the exchange differences arising on the translation of the borrowings as disclosed in note 18. In 2015, the tax debit relating to these items is £40,000 (2014: credit of £16,000).

The tax on the Group’s profit before tax differs from the standard rate of corporation tax in the UK of 20.25% (2014: 21.5%) as follows:

2015£’000s

2014£’000s

Profit before tax 2,409 2,370

Tax charge on profit before tax at standard rate of corporation tax in the UK of 20.25% (2014: 21.5%) (488) (510)Tax effects of:Non-taxable income and non-deductible expenses (552) 272Unrecognised deferred tax movement (183) (232)Recognition of previously unrecognised deferred tax asset 260 523Adjustments in respect of prior years 272 (125)Effect of overseas taxes on current taxes (157) (311)Effect of overseas taxes on deferred taxes 60 (391)

Tax charge (788) (774)



6766

8 Non-controlling interests The Group exercised its option to acquire a 49% non-controlling interest in SiSoft in June 2010, and in July 2013 we completed the acquisition of 55% of the minority interest (i.e. approximately 27% of the shares). Vendors representing approximately 22% of the shares (i.e. 45% of the 49% minority interest) are disputing certain aspects of the valuation and we are in a legal process in the French Commercial Court to resolve the matter. There is therefore a risk that the final consideration determined by the Court including related costs will be higher than the amount provided – see notes 16 and 26. We will provide a further update if the position changes materially or on the completion of the acquisition.

9 Dividends Dividends of £1.96 million (2014: £1.89 million) were paid during the year as follows:

Dividend

Dividend rate

p/share

2015Amount£’000s

Final dividend 2014 2.05 1,386 Interim dividend 2015 0.85 574

1,960

Dividend

Dividend rate

p/share

2014Amount£’000s

Final dividend 2013 1.95 1,316 Interim dividend 2014 0.85 573

1,889

The directors have recommended a final dividend of 2.05p per ordinary share for 2015 (2014: 2.05p) resulting in a total dividend for the year of 2.9p per ordinary share (2014: 2.9p). If the 2015 final dividend is approved at the Annual General Meeting in May 2016 the dividend will be paid on 25 May 2016 to shareholders on the register at the close of business on 29 April 2016 (ex-div date 28 April 2016). In accordance with IFRS, the dividend is not provided for as a liability in the accounts until it becomes a legal liability of the Company and will therefore be recorded in the interim and annual accounts for 2016.

10 Earnings per shareBasic earnings per share is calculated by dividing the profit attributable to ordinary shareholders by the weighted average number of ordinary shares in issue during the year. Diluted earnings per share is calculated by adjusting the weighted number of ordinary shares outstanding to assume conversion of all dilutive potential shares into ordinary shares. The Company has two categories of dilutive potential ordinary shares: shares to be issued and share options. For the share options, a calculation is performed to determine the number of shares that could have been acquired at fair value (determined as the average annual market share price of the Company’s shares) based on the monetary value of the subscription rights attached to the outstanding share options. The number of shares calculated as above is compared with the number of shares that would have been issued assuming the exercise of the share options.

Earnings per share – basic and diluted

Earnings2015

£’000s

Weighted average

number of shares

2015£’000s

Earnings per share 2015

pence

Earnings2014

£’000s

Weighted average

number of shares

2014£’000s


pence

Earnings per share – basic 1,621 67,568 2.4 1,596 67,479 2.4Potentially dilutive shares – 551 (0.0) – 60 (0.0)

Earnings per share – diluted 1,621 68,119 2.4 1,596 67,539 2.4

Earnings per share – adjusted

Earnings2015

£’000s

Weighted average

number of shares

2015£’000s


pence

Earnings2014

£’000s

Weighted average

number of shares

2014’000s


pence

Earnings per share – basic 1,621 67,568 2.4 1,596 67,479 2.4Add back: amortisation of acquired intangibles 32 – 0.0 188 – 0.3Add back: share-based payments 121 – 0.2 26 – 0.0

Adjusted earnings per share 1,774 67,568 2.6 1,810 67,479 2.7Potentially dilutive shares – 551 (0.0) – 60 (0.0)

Adjusted earnings per share – diluted 1,774 68,119 2.6 1,810 67,539 2.7

The adjusted earnings per share information has been provided in order to assist the reader to understand the underlying performance of the business on a comparable basis. Potentially dilutive shares exclude any anti-dilutive share options.

11 Intangible assetsGroup goodwill

Cost £’000s

At 1 January 2014 47,927Exchange differences (1,203)

At 31 December 2014 46,724Exchange differences (4,264)

At 31 December 2015 42,460

The movement on goodwill relates to exchange differences of £4.26 million (2014: £1.20 million). The total goodwill of £42.46 million includes goodwill for the North American region of £27.30 million (2014: £30.95 million) and goodwill for the EMEAA region of £15.16 million (2014: £15.77 million).

Goodwill impairment reviewThe carrying value of goodwill arising on acquisition is reviewed at each balance sheet date to assess whether there has been any impairment. Goodwill arising on acquisitions is allocated to cash generating units (‘CGUs’) by considering the Group’s share of the cash that is expected to be generated by the business or product that was acquired. The evaluation is based on management forecasts over the period five years forward and assuming a terminal value based on 3% growth thereafter. Discount rates are based upon a prudent risk-adjusted pre-tax weighted average cost of capital. The discount rates were increased in 2015 following a review of external market data.

2015 2014

Discount rate for CGUs EMEAA 11% 9%North America 12% 10%

To assess for impairment, the value in use of the CGU is compared to the goodwill. If the resultant net present value of the discounted cash flows is less than the carrying value for goodwill the difference is written off through the income statement. Key assumptions in the projection of cash flows are: levels of new sales, renewal rates, growth in expenses and the discount rate. Management base these projections on the latest budgets and forecasts which take into account market conditions and economic factors. The headroom is therefore dependent upon sensitivities to these and other assumptions. The directors believe that there is no reasonable possible change in estimates that would lead to an impairment of goodwill in the EMEAA region. The largest element of goodwill is in the North American region and if EBITDA in the region were 35% below forecast then this could result in impairment.



6968

2015 2014

Sensitivity for North AmericaHeadroom at 12% discount rate (2014: 10%) £9 million £12 millionHeadroom at 10% discount rate (2014: 7.5%) £21 million £39 millionDiscount rate indicating impairment 15% 13%

The fair value measure is also sensitive to exchange rates, and could have an impact on the goodwill impairment assessment. In particular the value of goodwill related to the FRI acquisition is linked to the Canadian dollar, whereas the underlying projection of cash flows is linked to exchange rates for several currencies. As a result, a strengthening Canadian dollar could have an adverse impact on the measured headroom. The goodwill on all acquisitions has been reviewed and, in the opinion of the directors, there is no impairment to the carrying value at 31 December 2015 (2014: nil).

Other intangible assetsGroup

Development costs

– internally generated

£’000s

Customer contracts

– acquired £’000s

Other intangibles

– purchased£’000s

Intangible assets– total

£’000s

Cost At 1 January 2015 23,948 2,893 1,311 28,152Additions 4,052 – 75 4,127Exchange differences – – (125) (125)

At 31 December 2015 28,000 2,893 1,261 32,154

Amortisation At 1 January 2015 18,700 2,861 769 22,330Charge for the year 3,538 32 196 3,766Exchange differences – – (95) (95)

At 31 December 2015 22,238 2,893 870 26,001

Net book value

At 31 December 2015 5,762 – 391 6,153

Included within internally generated development costs are costs capitalised of £3.03 million in relation to StatPro Revolution (2014: £2.13 million), the amortisation charge during 2015 was £2.14 million (2014: £1.84 million).

Development costs

– internally generated

£’000s

Customer contracts

– acquired £’000s

Other intangibles



£’000s

Cost At 1 January 2014 20,333 2,934 898 24,165Additions 3,615 – 438 4,053Exchange differences – (41) (25) (66)

At 31 December 2014 23,948 2,893 1,311 28,152

Amortisation At 1 January 2014 15,352 2,714 502 18,568Charge for the year 3,348 188 292 3,828Exchange differences – (41) (25) (66)

At 31 December 2014 18,700 2,861 769 22,330

Net book value

At 31 December 2014 5,248 32 542 5,822

Company Development

costs– internally generated

£’000s

Otherintangibles



£’000s

CostAt 1 January 2015 9,360 19 9,379Additions – – –

At 31 December 2015 9,360 19 9,379

At 1 January 2015 8,860 8 8,868Charge for the year 449 2 451

At 31 December 2015 9,309 10 9,319

Net book value

At 31 December 2015 51 9 60

Developmentcosts

– internallygenerated

£’000s

Otherintangibles



£’000s

CostAt 1 January 2014 8,695 19 8,714Additions 665 – 665

At 31 December 2014 9,360 19 9,379

Amortisation At 1 January 2014 8,354 6 8,360Charge for the year 506 2 508

At 31 December 2014 8,860 8 8,868

Net book value

At 31 December 2014 500 11 511



7170

Acquired and internally generated development costsExpenditure on research and development comprises salaries and related costs of personnel involved in software programming and development activities. Development costs are capitalised, where recognition criteria are met. As a result, there is an intangible asset relating to capitalised development costs (both internally developed and acquired) recognised on the Group’s balance sheet where the Board expects the benefits to be recovered through incremental revenue from future sales. Development expenditure is amortised over a three year period as, in the opinion of the directors, this is the period over which the benefits arise. The carrying values, which are analysed by product, are considered carefully by the Board and if there has been any impairment in any development costs then the carrying value is written down accordingly. There was no impairment in 2015 (2014: nil).

Customer contractsCustomer contracts acquired were valued on acquisition by estimating the future cash flows to be derived from those contracts over a period varying between three and seven years depending on the type of contract and discounting cash flows at a discount rate of 10% (2014: 10%), adjusting for any tax impact. The resultant fair value for the acquired customer contracts is amortised over a period of between three and seven years as, in the opinion of the directors, this is the period over which the benefits arise. At each balance sheet date the current values of the original contracts are reviewed against the carrying values to assess for impairment. The acquired customer contracts have been reviewed and, in the opinion of the directors, there is no impairment to the carrying value at 31 December 2015 (2014: nil).

12 Property, plant and equipmenta) Group

Improvements to short

leasehold property

£’000s

Office equipment

£’000s

Fixturesand

fittings £’000s

Computer equipment

£’000sTotal

£’000s

Cost At 1 January 2015 2,207 212 1,116 3,183 6,718Additions 153 27 90 611 881Disposals/write offs (938) (7) – (86) (1,031)Exchange differences (101) (7) (66) (311) (485)

At 31 December 2015 1,321 225 1,140 3,397 6,083

DepreciationAt 1 January 2015 1,532 145 661 1,910 4,248Charge for the year 134 18 96 748 996Disposals/write offs (938) (6) – (76) (1,020)Exchange differences (73) (6) (67) (228) (374)

At 31 December 2015 655 151 690 2,354 3,850

Net book value

At 31 December 2015 666 74 450 1,043 2,233

Improvements to short

leasehold property

£’000s

Office equipment

£’000s

Fixturesand

fittings £’000s

Computer equipment

£’000sTotal

£’000s

Cost At 1 January 2014 2,205 174 744 2,229 5,352Additions 384 57 392 1,030 1,863Disposals/write offs (335) (14) – (5) (354)Exchange differences (47) (5) (20) (71) (143)

At 31 December 2014 2,207 212 1,116 3,183 6,718

DepreciationAt 1 January 2014 1,474 150 605 1,240 3,469Charge for the year 376 11 79 726 1,192Disposals/write offs (286) (11) – (3) (300)Exchange differences (32) (5) (23) (53) (113)

At 31 December 2014 1,532 145 661 1,910 4,248

Net book value

At 31 December 2014 675 67 455 1,273 2,470

The carrying value of plant and machinery held under finance leases at 31 December 2015 was £101,000 (2014: nil). Additions during the year include £193,000 (2014: nil) of plant and machinery under finance leases.

As part of the financing arrangement with Wells Fargo Capital Finance, the bank has security over certain Group assets.

b) Company The Company had no property, plant or equipment at 31 December 2015 (2014: nil).

13 Investments in subsidiary undertakings2015

£’000s2014

£’000s

Company – cost and net book valueAt 1 January 2015 43,385 43,362Net increase in investments* 109 23

At 31 December 2015 43,494 43,385

* Included in increase in investments is £109,000 relating to share-based payments transactions with subsidiaries (2014: £23,000).



7372

The Company’s principal subsidiary undertakings at 31 December 2015 comprised the following:

Country of incorporation

Total percentage held by the

Group

Total percentage held by the

Company

StatPro Limited England and Wales 100% 100%Performa Consultants UK Limited England and Wales 100% 100%StatPro SA Luxembourg 100% –StatPro International S.a.r.l. Luxembourg 100% –StatPro (Deutschland) GmbH Germany 100% –StatPro France SARL France 100% –StatPro Italia Srl Italy 100% 100%SiSoft Sarl1 France 78% 78%StatPro Suisse SARL Switzerland 100% –StatPro Inc USA 100% 100%StatPro Canada Inc Canada 100% –StatPro North America Inc2 Canada 100% 100%StatPro South Africa (Pty) Ltd Republic of South Africa 100% 100%StatPro Asia Ltd Hong Kong 100% 100%StatPro Australia Pty Ltd Australia 100% 100%

1 StatPro Group plc has exercised its option to acquire the remaining 22% of SiSoft Sarl, however, the legal process for completion of the transfer is not complete as the remaining non-controlling holders are disputing the valuation (note 8).

2 StatPro North America Inc has been amalgamated into StatPro Canada Inc with effect from 1 January 2016.

All trading subsidiaries are involved in either the development, or marketing and distribution of software and data solutions and related professional services to the global asset management industry and have been included in the consolidation.

14 Trade and other receivablesCurrent assets: trade and other receivables

Group 2015

£’000s

Group 2014

£’000s

Company 2015

£’000s

Company 2014

£’000s

Trade receivables 6,219 5,794 – –Other receivables 111 58 3 –Prepayments 1,464 1,376 11 123Accrued income 286 228 – –VAT recoverable 109 121 – –Rental deposits 75 145 – –

8,264 7,722 14 123

The ageing of the Group’s trade debtors at 31 December 2015 is analysed as follows: 2015

£’000s2014

£’000s

Neither past due nor impaired 2,713 2,215Not more than three months 3,062 3,150More than three months and not more than six months 111 230More than six months 333 199

6,219 5,794

Trade receivables are non-interest bearing, are generally 30 – 60 days terms, and are shown net of a provision for impairment. As at 31 December 2015 trade receivables at nominal value of £9,000 (2014 £87,000) were determined to be impaired because of poor payment history of the debtor and fully provided for. Movements in the provision for impairment of receivables were as follows:

Group 2015

£’000s

Group 2014

£’000s

At 1 January 87 76Charge for the year 36 66Unused amounts reversed (78) (55)

At 31 December 45 87

The bad debt provision as a percentage of the trade receivables was 0.7% (2014: 1.5%).

Non-current assets: other receivablesGroup

2015£’000s

Group 2014

£’000s

Company 2015

£’000s

Company 2014

£’000s

Rental deposits 147 109 – –Receivables from subsidiaries – – 14,602 15,781

147 109 14,602 15,781

15 Trade and other payablesCurrent liabilities: trade and other payables

Group2015

£’000s

Group 2014

£’000s

Company2015

£’000s

Company2014

£’000s

Trade creditors 1,416 1,433 56 41Other creditors and accruals 2,053 2,903 228 259Other taxation and social security 1,185 1,752 – 1Payable to subsidiaries – – 12,425 15,644

4,654 6,088 12,709 15,945

Non-current liabilities: other creditors2015

£’000s2014

£’000s

Other creditors 47 76

47 76

The non-current ‘Other creditors and accruals’ of £0.05 million (2014: £0.08 million) relates to lease inducements, which are amortised over the period of the relevant lease.

16 Provisions Provisions – Group

2015Contingent

consideration£’000s

2015Onerous

contracts£’000s

2015Total

£’000s

2014Total

£’000s

At 1 January 676 62 738 980Utilised in the year – (55) (55) (190)Exchange differences (34) (7) (41) (52)

At 31 December 642 – 642 738



7574

The contingent consideration is the consideration on the SiSoft acquisition and is now expected to be utilised in 2016 although it is possible that it will fall beyond 12 months.

The ageing of provisions at 31 December 2015 is analysed as follows:

Group 2015

£’000s

Group2014

£’000s

Company2015

£’000s

Company2014

£’000s

Current 642 725 642 676Non-current – 13 – –

642 738 642 676

17 Deferred taxation Deferred tax comprises:

Deferred taxation – GroupAssets

2015Recognised

asset£’000s

2014Recognised

asset£’000s

2015Unrecognised

asset£’000s

2014Unrecognised

asset£’000s

Accelerated capital allowances – 4 – –Overseas tax losses 583 529 219 477Share-based payments 6 17 – –Other temporary differences 218 438 273 –

As at 31 December 807 988 492 477

Liabilities2015

(Recognised liability)£’000s

2014(Recognised

liability)£’000s

Fair value adjustment to intangible assets (10) (38)Other temporary differences (223) (411)

As at 31 December (233) (449)

The potential underlying tax losses and other timing differences at the year end were £11.04 million (2014: £10.67 million). Of the potential deferred tax asset of £1.30 million (2014: £1.47 million), a total of £0.81 million (2014: £0.99 million) was recognised. This represents 62% (2014: 67%) of the Group potential deferred tax assets. A proportion of the deferred tax asset has been recognised as in the opinion of the directors, it is probable that this proportion of assets will be recovered against future taxable profits. Deferred tax has been calculated at an estimated average rate for the Group of 20% (2014: 20%).

Deferred taxation – CompanyAsset and liability

2015Recognised

asset/ (Recognised

liability)£’000s

2014Recognised

asset/ (Recognised

liability)£’000s

2015Unrecognised

asset£’000s

2014Unrecognised

asset£’000s

Share-based payments 6 17 – –Other temporary differences (10) (101) – –

As at 31 December (4) (84) – –

Movements in deferred tax assetsGroup

2015Recognised

asset£’000s

Group2014

Recognised asset

£’000s

Company2015

Recognised asset

£’000s

Company2014

Recognised asset

£’000s

As at 1 January 988 450 18 36Differences in tax rates (48) (6) (1) (11)Recognised/(utilised) in the year (9) 560 (9) 4Tax credited directly to equity (2) (12) (2) (12)Exchange differences (122) (4) – –

As at 31 December 807 988 6 17

Movements in deferred tax liabilitiesGroup

2015(Recognised

liability)£’000s

Group2014


Company2015


Company2014


As at 1 January (449) (549) (101) (68)Differences in tax rates 22 72 5 9Utilised/(recognised) in the year 194 28 86 (42)

As at 31 December (233) (449) (10) (101)

No deferred tax liability has been recognised with respect to unremitted earnings at the balance sheet date as any profits distributed to the UK should meet the requirements of the UK dividend exemption and should be exempt from UK corporation tax. No deferred tax liability has been recognised with respect of investments in subsidiaries since, in the event of any sale, any gain or loss on disposal should meet the requirements of the UK Substantial Shareholders Exemption and should be exempt from UK corporation tax. From 1 April 2015, the main UK corporation tax rate reduced from 21% to 20%. Further reductions were announced in the UK budget on 8 July 2015 which will reduce the standard rate of UK corporation tax to 19% from 1 April 2017 and 18% from 1 April 2020. These changes in the UK rate were substantively enacted prior to the balance sheet date and therefore the impact of the changes are included within the current year tax charge.



7776

18 Financial instruments and financial risk managementThe Company’s and Group’s key financial risks and its approach to managing these risks are described in the Financial Review on pages 26 and 27.

a) Financial instrumentsThe Group’s financial instruments comprise cash, money market deposits, bank loans, provisions, derivative financial instruments and various other accounts receivable and accounts payable, that arise directly from its operations.

Cash and money market deposits, when held, are carried at fair value. All financial assets except derivatives belong to the category ‘loans and receivables’ in IAS 39. All financial liabilities except derivatives are held at amortised cost. The only derivative financial instruments relate to forward currency contracts which are purchased from banks and are considered Level 2 financial instruments in accordance with IFRS 13.

Bank loans are recorded at the value of the proceeds received less any direct issue costs which, due to the short-term nature of these instruments, approximates to fair value. They are subsequently stated at cost plus accrued interest, less any repayments which, due to the short-term nature of these instruments, approximates to amortised cost using the effective interest rate method.

Contingent consideration provision is considered a Level 3 financial instrument, further information on contingent consideration can be found in note 16.

Derivative financial instruments are used by the Group to hedge against various financial risks, such as foreign currency and interest rate risk. They are initially recognised at fair value and are designated by the entity at fair value through profit or loss.

As at 31 December 2015, the Group held forward currency hedging contracts to mitigate the effects of currency exposure relating to non-sterling financial assets and liabilities, cash flows and investments. The fair value of forward currency contracts relating to commercial transactions is recognised through the income statement, the net unrealised loss in respect of these contracts as at 31 December 2015 was £26,000 (2014: £14,000). The fair value of forward currency contracts relating to hedging of net investments designated in hedge accounting relationships is recognised through equity, and the net unrealised loss relating to these contracts recognised through equity as at 31 December 2015 was £9,000 (2014: unrealised gain £26,000).

The Company recognises financial instruments in its accounts when it enters into a binding agreement to receive cash or other economic benefits and derecognises them once all parties to the agreement have discharged all of their obligations.

Interest income and expenses are recognised in the income statement on an accruals basis. Realised gains and losses upon expiry of derivative financial instruments are recognised on settlement of the underlying contract.

Financial assetsThe Group’s and Company’s financial assets at the year-end are analysed as follows:

2015Group

£’000s

2014Group

£’000s

2015Company

£’000s

2014Company

£’000s

Cash and cash equivalents 2,203 2,692 224 897Financial instruments – 27 – 27Rental deposits falling due after more than one year 147 109 – –Rental deposits falling due within one year 75 145 – –Trade debtors 6,219 5,794 – –Accrued income 286 228 – –

8,930 8,995 224 924

Financial liabilitiesCommitted facilitiesThe Group signed in July 2015 a new financing facility with Wells Fargo Capital Finance available for acquisitions, share buy backs and general corporate purposes. The facility is committed to July 2020, subject to compliance with agreed covenants. At 31 December 2015, the Group had both net cash of £1.27 million and committed credit facilities of £10.0 million available. As part of the acquisition of Investor Analytics in January 2016, the financing facilities were increased and the key features of the facilities are:

• Five year commitment period to July 2020.• £10 million committed revolving credit facility.• US$7 million committed term loan.• US$3 million committed deferred drawdown loan.• £7.5 million uncommitted additional facility.

The primary financial covenants are linked to recurring revenue and adjusted EBITDA while allowing the Group to invest for growth. As part of the secured financing arrangement with Wells Fargo, the bank has security over certain Group assets, including pledges over shares in certain subsidiaries.

The maturity of the Group’s financial liabilities as at 31 December 2015 was as follows:

Payable in 1 year or less

£’000s

Payable in more than

1 but less than 2 years

£’000s

Payable in more than 2 but less

than 5 years£’000s

31 December 2015Total

£’000s

Bank loans and overdrafts 11 – 639 650Finance leases 107 107 55 269Financial instruments 41 – – 41Trade creditors 1,416 – – 1,416Other creditors and accruals 2,053 – – 2,053Provisions – contingent consideration 642 – – 642

4,270 107 694 5,071

The maturity of the Group’s financial liabilities as at 31 December 2014 was as follows:


£’000s



£’000s




£’000s

Bank loans and overdrafts 12 – – 12Financial instruments 15 – – 15Trade creditors 1,433 – – 1,433Other creditors and accruals 2,903 – – 2,903Provisions – contingent consideration 676 – – 676Provisions – onerous contracts 49 – 13 62

5,088 – 13 5,101

All trade creditors are due in less than three months.



7978

The maturity of the Company’s financial liabilities as at 31 December 2015 was as follows:


£’000s



£’000s




£’000s

Bank loans and overdrafts – – 639 639Financial instruments 41 – – 41Trade creditors 56 – – 56Other creditors and accruals 228 – – 228Payable to subsidiaries 12,425 – – 12,425Provisions – contingent consideration 642 – – 642

13,392 – 639 14,031

The maturity of the Company’s financial liabilities as at 31 December 2014 was as follows:


£’000s



£’000s




£’000s

Financial instruments 15 – – 15Trade creditors 41 – – 41Other creditors and accruals 259 – – 259Payable to subsidiaries 15,644 – – 15,644Provisions – contingent consideration 676 – – 676

16,635 – – 16,635

Net investment in foreign operationsAs part of our liability management, in order to provide a partial currency hedge against movements in the fair value of investments in overseas subsidiaries, we have made use of currency swaps to create synthetic currency hedges denominated in a mixture of currencies (USD, CAD, and EUR). At 31 December 2015, the Group had currency swaps in place, with a notional principal amount of £4.90 million (2014: £5.11 million) as synthetic loan hedges. The Group recognised a net gain on the hedging instrument of £0.20 million (2014: £0.08 million) in equity.

b) Financial risk managementInterest rate riskFinancial assets as at 31 December 2015

At floating interest rates

£’000s

At fixed interest rates

£’000s

Non interest- bearing£’000s

Total£’000s

Weighted average

interest rate%

Sterling 295 – 212 507 0.5%US dollar – – 233 233 –Euro 57 – 723 780 0.3%Swiss franc – – 73 73 –Australian dollar – – 12 12 –Canadian dollar – – 196 196 –South African rand 3 – 375 378 3.8%Hong Kong dollar – – 24 24 –

355 – 1,848 2,203

Financial assets are shown net of overdrafts under the Group Account (Currency) Terms of the Company’s loan facility with RBS.

Financial assets as at 31 December 2014At floating

interest rates£’000s


£’000s

Non interest- bearing£’000s

Total£’000s

Weighted average

interest rate%

Sterling 1,228 – 114 1,342 0.4%US dollar – – 189 189 –Euro 77 – 896 973 0.5%Swiss franc – – (13) (13) –Australian dollar – – 216 216 –Canadian dollar – – (85) (85) –South African rand 84 – 74 158 4.3%Hong Kong dollar – – (88) (88) –

1,389 – 1,303 2,692

Floating rate financial assets comprise cash, rental deposits and short-term bank deposits bearing interest based on bank base rates. The non-interest bearing financial assets represent rental deposits and cash balances held in non-interest bearing accounts in overseas entities. Trade debtors of £6.22 million (2014: £5.79 million) have been excluded from the above tables and are non-interest bearing.

Financial liabilities as at 31 December 2015At floating

interest rates£’000s


£’000s

Non interest-bearing£’000s

Total£’000s

Weighted average

interest rate%

Sterling 908 – – 908 4%Euro 11 – 642 653 –

919 – 642 1,561

Financial liabilities as at 31 December 2014

At floating interest rates

£’000s


£’000s

Non interest-bearing£’000s

Total£’000s

Weighted average

interest rate%

Canadian dollar – – 62 62 –Euro 12 – 676 688 –

12 – 738 750

Trade creditors, other creditors and accruals and other taxes of £4.65 million (2014: £6.09 million) have been excluded from the above tables and are non-interest bearing.

Floating rate financial liabilities predominantly relate to bank loans in sterling, Canadian dollars, US dollars and euros. Some debt is denominated in currencies in order to provide a currency hedge for profits generated by overseas subsidiaries and the investments in those overseas net assets.

As at 31 December 2015 the Group had no material borrowings and therefore it has not assumed any risk sensitivity to reasonably possible changes in interest rates (with all other variables held constant) on the Group’s profit before tax through the impact of floating rate borrowings. The Group did not assume any risk sensitivity in 2014 as it had no material borrowings.



8180

Currency riskThe Group’s principal exposure to exchange rate fluctuations arises on the translation of overseas net assets and trading results into sterling for accounting purposes. The Group has a minimal transaction risk as most of the transactions are invoiced by the entities in their local currency. Where there are material exposures, these are covered by taking out currency contracts to eliminate the exposure. However, offsetting revenues against costs in the same currency reduces this risk so that only the residual accounting profit translation element is at risk. The balance sheet exposures are minimised by reducing the net asset exposure, for example, by arranging borrowings in local currency where appropriate. Where the resulting hedge qualifies for hedge accounting under IAS 39 the gains and losses on the translation of both the loan and the investment are deferred in equity. As the Group continues to grow and generates greater net profits overseas this exchange rate exposure will increase. Following the increase in the percentage of the Group’s operations that are overseas, the exposure to US dollars and euros in particular has increased.

The table below shows the estimated sensitivity of the profit before tax and the net assets to movements in the key exchange rates to which the Group is exposed. If the US dollar and the euro strengthen/(weaken) against sterling this is expected to increase/(decrease) profits as shown below.

Change in Currency vs.

GBP

Effect on profit

before tax £’000s

2015US dollar/sterling +5% 58

-5% (53)Euro/sterling +5% 209

-5% (189)

2014US dollar/sterling +5% 77

-5% (70)Euro/sterling +5% 257

-5% (233)

The main balance sheet translation exposure is to the revaluation of goodwill denominated in foreign currency; the largest component relates to the goodwill arising on the acquisition of FRI, a Canadian business and is denominated in Canadian dollars. A depreciation of 10% in sterling against the Canadian dollar would result in a £2.9 million increase in net assets and an appreciation of 10% in sterling against the Canadian dollar would result in a £2.3 million decrease in net assets.

The fair value of all financial assets and liabilities is approximately equal to book value. The Group has a forward foreign exchange facility which allows the Group to hedge foreign exchange exposures. The Group does not permit anyone in the Group to trade in financial instruments.

Counterparty credit riskThis is the risk that a counterparty will be unable to pay amounts in full when due. Credit risks are associated with deposits with banks and receivables from customers. The Group takes into account the credit risk of the counterparty to any major bank deposits but currently the level of bank deposits is such that this is not considered a material risk. There is no large concentration of credit risk with customers as the largest customer group currently represents less than 6% of projected Group revenues. The maximum exposure to credit risk comprises the value of the Group’s cash and debtor balances from time to time.

Liquidity riskThis is the risk that the Group will have insufficient funds to meet its cash obligations when due. The Group manages this risk by close monitoring of projected cash collection from customers and cash obligations to suppliers and salary payments to staff, as well as all other cash commitments. At 31 December 2015, the Group also had £10 million headroom under its committed revolving credit and overdraft facility in addition to cash reserves to reduce the risk that an unforeseen change in the Group’s liquidity position will result in a breach of statutory or other payment obligations.

The table below summarises the maturity of the Group’s financial liabilities as at 31 December 2015 and 2014 based on contractual undiscounted payments.

The Group’s liquidity risk – 31 December 2015

On demand£’000s


£’000s

Payable in more than 1

but less than 2 years£’000s




£’000s

Non-derivative financial liabilitiesInterest bearing loans and overdrafts – 11 – 639 650Finance leases – 107 107 55 269Trade creditors and other payables – 3,469 – – 3,469Other liabilities – 642 – – 642

– 4,229 107 694 5,030

Derivative financial liabilitiesForeign exchange forward contracts outflow – 5,574 – – 5,574Foreign exchange forward contracts inflow – (5,539) – – (5,539)

– 35 – – 35

The Group’s liquidity risk – 31 December 2014

On demand£’000s


£’000s





31 December 2014 Total

£’000s

Non-derivative financial liabilitiesInterest bearing loans and overdrafts – 12 – – 12Trade creditors and other payables – 4,336 – – 4,336Other liabilities – 725 – 13 738

– 5,073 – 13 5,086

Derivative financial liabilitiesForeign exchange forward contracts outflow – 5,923 – – 5,923Foreign exchange forward contracts inflow – (5,939) – – 5,939

– (16) – – (16)



8382

The Company’s liquidity risk – 31 December 2015

On demand£’000s


£’000s




£’000s

Non-derivative financial liabilitiesTrade creditors and other payables – 284 – 284Other liabilities – 642 – 642Payable to subsidiaries – 12,425 – 12,425

– 13,351 – 13,351

Derivative financial liabilitiesForeign exchange forward contracts outflow – 5,574 – 5,574Foreign exchange forward contracts inflow – (5,539) – (5,539)

– 35 – 35

As noted in the Financial Review, the Group has a further £10 million of undrawn facilities available to it under the terms of its revolving credit and working capital facilities.

The Company’s liquidity risk – 31 December 2014

On demand£’000s


£’000s






£’000s

Non-derivative financial liabilitiesTrade creditors and other payables – 300 – – 300Other liabilities – 676 – – 676Payable to subsidiaries – 15,644 – – 15,644

– 16,620 – – 16,620

Derivative financial liabilitiesForeign exchange forward contracts outflow – 5,923 – – 5,923Foreign exchange forward contracts inflow – (5,939) – – (5,939)

– (16) – – (16)

Capital riskThe Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain further development of the business. The Board monitors the composition of investors as well as the return on capital, measured as earnings per share (profit attributable to shareholders divided by the weighted average number of ordinary shares in issue during the year). The capital managed by the Group comprises equity of £41.52 million (2014: £45.69 million) and borrowings of £0.92 million (2014: £12,000) as capital.

19 Obligations under operating leasesThe total of future minimum lease payments under non-cancellable operating leases are:

2015£’000s

2014£’000s

Land and buildingsDue within one year 1,431 1,296Due between one year and five years 3,475 4,395Due beyond five years 992 1,177

5,898 6,868

2015£’000s

2014£’000s

Other leasesDue within one year 39 56Due between one year and five years 48 74Due beyond five years – –

87 130

The carrying value of finance leases was £0.27 million (2014: nil). The total of future minimum lease payments under finance leases are shown below:

2015£’000s

2014£’000s

Computer equipmentDue within one year 113 –Due between one year and five years 170 –Due beyond five years – –

283 –

20 Called up share capital2015

£’000s2014

£’000s

Authorised125,000,000 (2014: 125,000,000) ordinary shares of 1p each 1,250 1,250

Allotted, called up and fully paid67,813,650 (2014: 67,707,650) ordinary shares of 1p each 678 677

The Company has only one class of ordinary shares in issue and there are no restrictions regarding voting or other distribution or repayment rights. At 31 December 2015, the Company held 225,000 shares in treasury (2014: 225,000), and therefore 67,588,650 ordinary shares is the number of shares that may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company under the FSA’s Disclosure and Transparency Rules, and for earnings per share calculations. The share premium account has increased to £23.54 million (2014: £23.47 million).

Shares in issue at 1 January 2015 67,707,650Share options exercised 106,000

Shares in issue at 31 December 2015 67,813,650

Proceeds of £63,600 (2014: £2,400) were received in 2015 following the exercise of 106,000 share options (2014: 4,000 share options) at 60p.



8584

At 31 December 2015, the following options over shares/share awards in the Company were outstanding:

2015 2014

Number ofoptions

‘000s

Weighted average

exercise price

Number ofoptions

‘000s

Weighted average

exercise price

Outstanding at 1 January 5,619 107p 6,245 109pGranted 710 0p – –Exercised (106) 60p (4) 60pLapsed (723) 94p (622) 123p

Outstanding at 31 December 5,500 96p 5,619 107pExercisable at 31 December 1,230 124p 1,004 90p

For options and share awards outstanding at 31 December 2015, the exercise price and weighted average remaining contractual lives were as shown below:

Options Outstanding Options Exercisable

No ofshares

Weighted average

remaining life (yrs)

No ofshares

Weighted average

remaining life (yrs)

Exercise price 0p 710,000 2.7 – –88p 100,000 0.8 100,000 0.898p 340,000 7.2 – –100p 1,070,000 2.4 250,000 –108p 2,400,000 6.2 – –135p 880,000 1.4 880,000 1.4

5,500,000 4.2 1,230,000 1.0

Share-based paymentsUnder the approved and unapproved option schemes the Remuneration Committee can grant options to employees of the Group. Options have been granted with a fixed exercise price which is typically issued at a premium to the market price. The contractual life is generally ten years from date of grant although occasionally a shorter period has been chosen. Options become exercisable after three years although exceptionally the period is shorter. Options issued to directors and senior executives carry performance criteria. There are other vesting conditions for options identified in the scheme rules, including performance conditions which are in the option terms with typically eps growth above a minimum hurdle, share price growth above a minimum level and a vesting period of three years. Options are valued using the Black-Scholes option-pricing model and the fair market value after consideration of market based performance conditions has been estimated using the following key assumptions:

There were no share options issued in 2014. Details of options/share awards issued in 2015 were:2015Issue

Average exercise price 0pAverage market price at date of grant 78.5pTotal number of options under grant (granted after November 2002) 710,000Average vesting period (years) 3.5Expected volatility 40%Option life (years) 3.5Expected life (years) 3.5Risk free rate 1.29%Expected dividend yield 3.69%Expected lapse rate 13%Fair value of options issued in year 78.5p

The risk free rate is based on the yield to maturity of a UK government bond for a term consistent with the assumed life of the options. The average share price in the year was 77.5p. The expected volatility level was determined by comparing the historic and current volatility for the Company and comparing with the average volatility for companies in the same sector to determine a reasonable estimate for the future volatility. The total charge in the income statement for the year relating to employee share-based payments for the Group was £121,000 (2014: £26,000) and for the Company was £12,000 (2014: £3,000).

There were 1,230,000 options exercisable at the balance sheet date (2014: 1,003,500), with a weighted average exercise price of 124p (2014: 90p). The weighted average remaining contractual life for options outstanding at the balance sheet date is 4.2 years (2013: 4.9 years).

On 10 March 2015, the Company issued 106,000 shares following the exercise of options under the Approved and Unapproved schemes.

21 Related party transactions During the year, the Group paid a fee of £10,000 (2014: £3,000) for training courses and other services supplied by Otos Limited, of which Carl Bacon is a Director. The year-end creditor balance with Otos Limited was £3,600 (2014: nil).

StatPro Group plc made a financial support payment of £50,000 in 2015 (2014: £50,000) to The Freedom Index Company Ltd, Freedom Index benchmarks, which are made available free-of-charge to the asset management community. Carl Bacon receives no fee for his services as a director of The Freedom Index Company Ltd.

During the year, the Group paid a fee of £4,050 (2014: £10,800) for consultancy services supplied by Mark Adorian (Non-Executive Director) in relation to StatPro Revolution sales initiatives including developing the sales function. The year-end creditor balance with Mark Adorian was nil (2014: nil).

The Company undertakes a range of transactions, including management recharges, with its subsidiaries, which are summarised as follows:

Transactions with related parties

Balances (owed by)/ due to the Company

as at 31 December

2015£’000s

Balances (owed by)/ due to the Company

as at 31 December

2014£’000s

Payable to subsidiariesStatPro Limited (2,519) (4,807)Performa Consultants UK Limited – (2,328)StatPro SA (29) (89)StatPro France – –StatPro Inc (3,354) (2,059)StatPro Canada Inc (6,523) (6,361)

(12,425) (15,644)

Receivables from subsidiaries StatPro South Africa (Pty) Ltd 66 83StatPro North America Inc 4,394 4,565StatPro International S.a.r.l. 10,142 11,133

14,602 15,781



8786

Nature of transactions

Value of transactions

2015£’000s

Value of transactions

2014£’000s

Revenue from subsidiaries 9,932 10,561Expensed recharges from subsidiaries (11,284) (11,963)Expenses recharged to subsidiaries 3,539 2,232Interest paid to subsidiaries (765) (799)Interest received from subsidiaries 920 884Dividends received from subsidiaries 500 545

Key management includes the executive directors and other members of the Group Executive Board. The compensation paid or payable to the executive directors is shown in the directors’ Remuneration Report on pages 44 and 45 and the share-based payment charge relating to the executive directors is £50,000 (2014: £35,000). The compensation paid or payable to key management for employee services is shown below:

Key management compensation

Year to31 December

2015£’000s

Year to31 December

2014£’000s

Salaries and other short-term employee benefits 1,246 1,446Defined contribution pension benefits 60 43

1,306 1,489Share-based payment 118 55

1,424 1,544

22 Reconciliation of profit before tax to net cash inflow from operating activities

Group2015

£’000s

Group2014

£’000s

Company2015

£’000s

Company2014

£’000s

Profit before taxation 2,409 2,370 2,205 2,373Dividends received – – (500) (545)Net finance expense 290 291 284 211

Operating profit 2,699 2,661 1,989 2,039Depreciation of property, plant and equipment 996 1,192 – –Loss on disposal of property, plant and equipment 11 42 – –Amortisation of intangible assets 3,766 3,828 451 508(Increase)/decrease in receivables (782) (1,597) 1,100 (32)(Decrease)/increase in payables and provisions (1,402) 1,364 (3,236) (820)Increase/(decrease) in deferred income 1,139 189 – –Share-based payments 121 26 12 3

Net cash inflow from operating activities before exceptional items 6,548 7,705 316 1,698

23 Analysis of changes in net cashAt

1 January 2015

£’000sCash flow

£’000s

Non-cash changes

£’000s

Exchange differences

£’000s

At 31 December

2015£’000s

Cash and cash equivalents (per balance sheet) 2,692 (355) – (134) 2,203Overdrafts – – – – –

Cash and cash equivalents (per statement of cash flows) 2,692 (355) – (134) 2,203Finance leases – (269) – – (269)Bank and other loans (12) (639) – 1 (650)

Net cash 2,680 (1,263) – (133) 1,284

At 1 January

2014£’000s

Cash flow£’000s

Non-cash changes

£’000s

Exchange differences

£’000s

At 31 December

2014£’000s

Cash and cash equivalents (per balance sheet) 4,014 (1,269) – (53) 2,692Overdrafts – – – – –

Cash and cash equivalents (per statement of cash flows) 4,014 (1,269) – (53) 2,692Bank loans (net of issue costs deferred) (12) – – – (12)

Net cash 4,002 (1,269) – (53) 2,680

24 Reconciliation of net cash flow to movement in net cash2015

Group£’000s

2014Group

£’000s

2015Company

£’000s

2014Company

£’000s

Increase in cash and cash equivalents in the year (355) (1,269) (673) (434)Movement on bank loans (639) – (639) –Movement on finance leases (269) – – –Exchange movements (133) (53) – –

Movement in net cash (1,396) (1,322) (1,312) (434)Net cash at beginning of year 2,680 4,002 897 1,331

Net cash at end of year 1,284 2,680 (415) 897

25 PensionsThe Company operates a defined contribution pension scheme for directors and certain employees. The total costs of pension contributions during the year were £418,000 (2014: £447,000). Contributions outstanding at the end of December 2015 were £42,000 (2014: £60,000).

26 Contingent liabilitiesAs is normal for a group of this size and scope of operations, Group companies are involved in a number of potential legal claims and disputes from time to time arising from our activities, none of which are expected to have a material impact on the Group’s financial results.

The Board expects the remaining contingent consideration payable to the 45% minority shareholder (22% of total shares) in Sisoft to be in the range of €0.7 million – €1.1 million (approximately £0.6 million – £0.9 million). It is possible that it will not be fully resolved during 2016. There is also a risk that the final consideration determined by the Court including related costs will be higher than the amount provided, although the Board’s estimate of the measurement of the liability has not changed (allowing for fluctuations in exchange rates).



8988

27 Capital commitmentsAt 31 December 2015, the Group had expenditure committed but not yet incurred of £0.80 million (2014: nil).

28 Post Balance Sheet EventsAcquisition of Investor AnalyticsOn 21 January 2016, StatPro Inc. (a wholly owned subsidiary of the Company) acquired the entire share capital of Investor Analytics LLC (‘IA’), the US-headquartered, cloud-based risk analytics’ company to hedge funds and asset managers for a cash consideration of US$10 million. There is an additional contingent payment of up to US$6 million, payable after one year, which is dependent on securing a number of new contract wins.

Highlights of the acquisition are:• Complementary Risk Factor and Monte Carlo models to add to StatPro’s Historical Simulation risk model• Significantly increases StatPro’s US presence, enhancing geographical reach• Annualised Recurring Revenue (‘ARR’) of US$4.85 million (£3.3 million)• Increases StatPro’s cloud-based ARR to 34% of total Group ARR from 27%• Expected to be earnings enhancing in 2016 on a pro forma basis following completion of the integration programme• 53 client contracts – all new client relationships for StatPro • Cash consideration:

• US$7 million on closing• Two deferred payments – US$2 million after one year and US$1 million after two years • Additional contingent payment – up to US$6 million after one year, dependent on securing a number of new contract wins

Based on unaudited results for the year ended 31 December 2015, IA is expected to report revenue of US$5.0 million (of which approximately 94% was recurring) and an EBITDA loss of approximately US$0.3 million. Cost synergies are expected to be approximately US$1.0 million per annum (£0.7 million) for data feeds, administrative services and other costs.

Acquisition of majority control of InfoVestWith effect from 1 March 2016, StatPro South Africa (Pty) Ltd. (a wholly owned subsidiary of the Company) acquired a 51% shareholding in InfoVest Consulting (Pty) Ltd (‘InfoVest’), a South African headquartered software provider, specialising in data warehouse, ETL and reporting software for the asset management industry. The purchase has been made via the transfer of StatPro Portfolio Control (‘SPC’) licence agreements to InfoVest, which StatPro provides to South African clients and which InfoVest currently supports on behalf of StatPro.

Highlights of the acquisition are:• Acquisition of 51% of InfoVest • Purchase settled by the transfer of SPC licence contracts to InfoVest• Joint marketing agreement signed to promote each other’s products and services• Justin Wheatley, StatPro CEO and Craig Arenhold, CEO StatPro South Africa will join InfoVest Board, although the business

will be managed independently• Deal is expected to be earnings enhancing in 2016

Given increased regulations there is a growing demand for compliance management solutions such as SPC, which is a module of one of StatPro’s products, StatPro Seven. By taking a majority stake in InfoVest, StatPro will benefit from this expanding market as well as improving the product and services it offers.

InfoVest’s data warehouse software is a cost effective solution for asset managers and service providers to manage their internal data effectively in order to provide both input data to other systems and for reporting. The success of implementing a solution such as StatPro Revolution Performance depends on a client’s ability to provide data in a reliable manner. InfoVest’s software is designed to do precisely this.

In addition, StatPro and InfoVest have entered into a joint marketing agreement to promote each other’s products and services as part of StatPro. InfoVest products will keep their current branding, whilst benefiting from the marketing reach of StatPro.

Based on unaudited results for the year ended 28 February 2015, InfoVest reported revenue of ZAR 18.0 million (approximately £0.76 million), including approximately £0.13 million revenue for supporting SPC.

Additional disclosures under IFRS 3 in relation to the fair value of the consideration, acquisition date assets and acquisition date liabilities have not been included in these accounts for either of the two investments as management are in the process of assessing these accounting values.



9190

FINANCIAL CALENDAR

Annual General Meeting 19 May 2016Final dividend for 2015 25 May 2016Interim Report for 2016 August 2016Interim dividend for 2016 2 November 2016Preliminary announcements of 2016 results March 2017Report and Accounts for 2016 April 2017

FIVE YEAR RECORDSTATPRO GROUP PLC

2015£’000s

2014£’000s

2013£’000s

2012£’000s

2011£’000s

Revenue– Continuing operations 30,187 32,018 32,486 32,001 31,715

– Annualised Recurring Revenue (value at year end 2015 fx rates) 28,700 28,330 27,270 27,060 25,980

Operating profit– Continuing operations (before exceptional items) 2,699 2,661 3,733 5,253 4,490– Exceptional operating items – – (347) (978) –

2,699 2,661 3,386 4,275 4,490Net finance expense (290) (291) (273) (493) (627)

Profit before taxation 2,409 2,370 3,113 3,782 3,863Taxation (788) (774) (1,030) (1,102) (955)

Profit after taxation 1,621 1,596 2,083 2,680 2,908

Profit attributable to equity shareholders 1,621 1,596 2,083 2,680 2,908

Adjusted EBITDA* 4,044 4,359 5,463 6,728 6,118

Cash inflow from operating activities 6,548 7,705 9,403 9,233 9,925

Free cash flow 624 606 3,277 3,476 3,865

Net assetsGoodwill and other intangible assets 48,613 52,546 53,524 57,683 59,045Property, plant and equipment 2,233 2,470 1,883 1,974 2,390Other assets and receivables 9,416 8,846 6,883 7,609 7,227Cash 2,203 2,692 4,014 3,681 2,447Current liabilities (19,778) (20,271) (18,514) (19,927) (19,445)Non-current liabilities (1,170) (598) (882) (1,400) (7,834)

Net assets 41,517 45,685 46,908 49,620 43,830

Shareholders’ equityShare capital 678 677 677 677 616Share premium 23,537 23,474 23,472 23,472 17,675Shares to be issued 63 63 63 63 63Treasury shares (249) (249) (249) (249) (249)Other reserves 2,692 6,704 7,650 10,776 11,760Retained earnings 14,796 15,016 15,295 14,881 13,965

Total shareholders’ equity 41,517 45,685 46,908 49,620 43,830

Net cash/(debt) 1,284 2,680 4,002 3,667 (3,399)

Earnings per share – basic 2.4p 2.4p 3.1p 4.3p 4.8p

Earnings per share – diluted 2.4p 2.4p 3.1p 4.3p 4.7p

Adjusted earnings per share* 2.6p 2.7p 4.5p 5.9p 5.7p

Dividends per share 2.9p 2.9p 2.8p 2.7p 2.6p

* Adjusted for amortisation of acquired intangibles, share-based payments and exceptional items.


9392

DIRECTORS AND ADVISERS

DirectorsCarl Bacon Non-Executive ChairmanJustin Wheatley Group Chief ExecutiveAndrew Fabian Group Finance DirectorMark Adorian Non-Executive DirectorStuart Clark Non-Executive DirectorJane Tozer Non-Executive Director

Secretary and registered officeAndrew Fabian Mansel CourtMansel RoadWimbledonLondon SW19 4AA

RegistrarsCapita Asset ServicesThe Registry34 Beckenham RoadBeckenhamKent BR3 4TU

NOMAD and BrokerPanmure Gordon (UK)One New ChangeLondon EC4M 9AF

SolicitorsBoyes Turner Abbots HouseAbbey StreetReading RG1 3BD

Registered AuditorsErnst and Young LLP1 More London PlaceLondon SE1 2AF

BankersWells Fargo Capital Finance5th Floor1 Bread StreetLondon EC4M 9BE

The Royal Bank of Scotland plc280 BishopsgateLondon EC2M 4RB

Financial PR ConsultantsInstinctif Partners65 Gresham Street London EC2V 7NQ

Company Registration no: 2910629Incorporated in England & Wales

STATPRO OFFICE LOCATIONS

NORTH AMERICA EUROPE REST OF THE WORLD

StatPro Inc.100 High StreetSuite 1550BostonMA 02110USA

StatPro Ltd.Mansel CourtMansel RoadWimbledonLondonSW19 4AAUnited Kingdom

StatPro South Africa Pty Ltd.Suite 303, 3rd FloorClock Tower Office SuitesV&A WaterfrontCape Town 8001South Africa

T: +1 617 692 1150 T: +44 20 8410 9876 T: +27 21 443 2140

StatPro Inc.(Investor Analytics)55 Broad Street25th FloorNew YorkNY 10004USA

StatPro France SARL62 Rue de laChaussée d’Antin75009 ParisFrance

StatPro Asia Ltd.Unit 4607-11Level 46The Center99 Queen’s Road CentralHong KongChina

T: +1 646 553 4500 T: +33 1 40 20 1200 T: +852 3796 7065

StatPro Canada Inc.1801 McGill College AvenueSuite 750MontréalQuébec H3A 2N4Canada

StatPro Italia SrlVia Edmondo De Amicis 5320123 MilanItaly

StatPro Australia Pty Ltd.Chatswood ChambersLevel 10815 Pacific HighwayChatswood, SydneyNSW 2067Australia

T: +1 514 842 5091 T: +39 02 00 693 1 T: +61 2 9884 9045

StatPro Canada Inc.33 Yonge StreetSuite 271TorontoOntario M5E 1G4Canada

StatPro (Deutschland) GmbHKirchnerstraße 6-860311 Frankfurt am MainGermany

For enquiries please email:[email protected]

www.statpro.com

T: +1 416 598 9500 T: +49 (0) 69 24 43 22 000

StatPro International S.a.r.l.85-87 Grand RueL-1661 LuxembourgLuxembourg

T: +352 28 37 1448

StatPro S.A.85-87 Grand RueL-1661 LuxembourgLuxembourg

T: +352 30 74 24 1

+44 (0)1244 304 030

StatPro Group plcMansel CourtMansel RoadWimbledon LondonSW19 4AAUnited Kingdom

T: +44 20 8410 9876F: +44 20 8410 9877

[email protected]

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